Victoria isn’t the only state making a case for AI infrastructure. Tasmania has quietly built a competing pitch to become Australia’s AI factory location, built on two natural advantages no mainland state can fully replicate: climate and clean power.
Firmus Technologies — the same company partnering with Nvidia on Melbourne’s Project Southgate — chose Tasmania specifically for its cool climate, which lets AI hardware run with minimal or no active water cooling for most of the year, and its access to abundant hydro and wind generation via state-owned Hydro Tasmania.
That advantage has drawn roughly A$2.1 billion of AI factory construction to Launceston alone, with two further sites proposed in the state’s north and around 400 megawatts of combined load across the three — enough, on some estimates, to draw close to 20% of the state’s total power capacity.
That scale of demand has now triggered formal scrutiny. Tasmania’s Parliament opened a House of Assembly inquiry into AI data centres on 18 August 2026, after the Government Administration Committee A resolved to launch it on 5 August, with submissions open until 21 September.
Chaired by Labor MP Brian Mitchell with Greens MP Tabatha Badger as deputy chair, the committee has the power to recommend actual legislation and regulation — covering how power and water get allocated, what proponents must disclose, and what tangible benefit Tasmanians receive in return.
That matters because Tasmania currently has no dedicated data centre policy framework: its only relevant document is the Data Centre Action Strategy, an investment-attraction paper last updated by the Office of the Coordinator-General back in 2018, long before AI-scale gigawatt loads were a consideration.
By contrast, NSW, South Australia and Victoria have each already published their own frameworks addressing these same questions. Tasmania’s inquiry is effectively writing the state’s first real rulebook for AI-scale load after the investment has already arrived — precisely the sequencing risk that critics of fast-moving data centre approvals across the country, including in Victoria’s own Geelong corridor, have been warning about.
