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NextDC
Australia is fast becoming a hub for artificial intelligence (AI) infrastructure, with NextDC partnering with OpenAI on a $7 billion Sydney data centre.
(AI video summary)
This video was created on 5 December 2025 for IG audiences by ausbiz.
ASX code: NXT
Australia joins the AI data centre race
Artificial intelligence (AI) adoption is driving demand for data centres, and Australia is emerging as a key player. NextDC has partnered with OpenAI, which will be the main customer of a $7 billion data centre at Sydney’s Eastern Creek. It will be the largest in the Southern Hemisphere and support AI models for OpenAI’s Australian clients, including the Commonwealth Bank of Australia (CBA).
Investors are eyeing the AI data centre thematic, with Macquarie Technology Group also in focus.
Risks behind the data centre boom
Analysts suggest data centre operators are capital-intensive, with heavy upfront costs and uncertain returns. History – from railways to the telecommunications boom – shows overbuilding risk.
NextDC illustrates this: financial year (FY) 2025 earnings before interest, tax, depreciation and amortisation (EBITDA) were forecast at $340 million, but now sit at $225 million, highlighting modelling challenges.
Investment outlook
Analysts lean toward Macquarie for its mix of data centres, information technology (IT) services, and legacy telecommunications (telco) operations. Its sovereign data centre focus adds resilience. Macquarie funds capital expenditure (CapEx) largely through free cash flow, reducing reliance on external capital.
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