Sydney Green Space Set to Make Way for Massive AI Data Centre as Backlash Grows

A vast stretch of unused green land next to Sydney Airport is set for a major overhaul, with more than 70 hectares earmarked for a multibillion-dollar precinct built around an artificial intelligence data centre, logistics hub and commercial complex, as Australia’s appetite for cloud computing, Google services, ChatGPT and other online platforms continues to surge.

The large-scale development will reshape the former Kogarah Golf Club site at Arncliffe, where the proposed data centre is expected to serve as the centrepiece of a project valued at between $2.9 billion and $3.5 billion.

Plans for the wider precinct include logistics warehouses, office space, retail and hospitality venues, an 18-storey hotel and close to 1,600 car parking spaces, with the digital infrastructure component positioned as the foundation of the entire redevelopment.

The project follows the March 2025 sale of Kogarah Golf Club’s land to John Boyd Properties for more than $50 million, a deal that helped finance the club’s move to the new Oak Point Golf Club at Lansvale, beside the Georges River.

For the club, established in 1928, the transaction closed a significant era. Its members had already endured nearly a decade on a shortened 15-hole layout after a portion of the course was resumed in 2016 for the WestConnex motorway project.

‘It’s a pretty devastating time for all of the members. Everybody is affected by this,’ long-time Kogarah Golf Club general manager Tony Rodgers told Australian Golf Digest in 2025.

‘Government departments have no commercial imperative. They do what’s important for the government of the day. When you’re needing something off them, they’ve got many other people to satisfy. You just get in line and interests change over time.

However, the proposal has drawn criticism from parts of the local community, with opponents questioning whether one of the area’s remaining open green spaces should be converted into another power-intensive data centre precinct.

‘Need to keep the green space,’ one person said.

‘Public green space in an overdeveloped area for another power-draining, water-abusing box,’ another said.

A third added: ‘The golf course should be retained as golf is hugely beneficial for physical and mental health.’

The redevelopment will include five hectares for hotels, offices, serviced apartments, shops and restaurants, while 14 hectares will be handed to Bayside Council for a public park and new cycling and walking paths along the Cooks River.

But the sprawling AI data centre will dominate much of the site.

The project is the latest sign of Australia’s AI infrastructure boom, with data centres springing up across the country in what some have compared to the mining boom.

The concept plan and early works application have been placed on public exhibition through the NSW Planning Portal, with construction expected to begin in 2027. 

Australia now has the world’s second-largest pipeline of AI data centres under construction, behind only the United States.

According to Toby Walsh, Laureate Fellow and Scientia Professor of Artificial Intelligence at the University of New South Wales, Australia has become an attractive destination for data centre developers because of its ‘stable politics and economy’.

‘The spend (on the centres) is, according to ABS quarterly figures, keeping our economy afloat and stopping us going into recession,’ he said.

‘But it comes with some costs; huge amounts of energy.

‘Every time you ask ChatGPT a question, stream a movie on Netflix, access your online bank account, or buy some goods on Amazon, a computer in some anonymous data centre, typically on the edge of town, spins up and does that computing.

‘The largest data centre being built in NSW (the CDC Data Centres facility in Marsden Park) will… use 5 per cent of all of Australia’s electricity.’

Walsh said noise and water use were also major concerns.

‘That electricity causes a lot of heat, which means many data centres also use lots of cooling water, and the chillers for that cooling are noisy, which is problematic when data centres are in urban areas.’

Leading economist Leith Van Onselen from MacroBusiness.com.au warned Australia’s AI data centre boom will place enormous pressure on the nation’s electricity grid, and warned it is coinciding with several other trends that will dramatically increase power demand.

‘The biggest risk I see is that the data centre boom is forecast to coincide with other factors that are going to massively increase the demand for electricity in Australia,’ he told 2GB.

‘On top of that, the government’s official projections show the population is going to grow by 13 million people, or about 50 per cent, over the next 40 years. Obviously, all these extra people, roughly the equivalent of adding another Sydney, Melbourne and Perth combined, are going to need more electricity.

‘The government also wants to completely electrify the vehicle fleet. So, all the millions of vehicles in Australia are supposed to go from petrol and diesel to electric over the coming decades. Well, that’s going to massively increase electricity demand.’

Van Onselen said those factors would create a huge surge in electricity demand just as Australia phases out coal-fired power.

‘What this basically tells you is that Australia is facing a monstrous increase in demand for electricity to meet all these needs. 

‘At the same time, our idiotic government has committed to closing down the nation’s baseload, non-weather-dependent coal generation in favour of wind and solar backed by storage.

‘So, how is Australia going to power data centres, the electrification of the vehicle fleet, massive population growth, all these new water desalination plants that will need to be built, and the general economy, when we’re going to shut down our only stable 24/7 supply of electricity, which comes from coal, in favour of things we cannot control, namely wind and solar?’

He said recent periods of low wind generation highlighted the challenge of relying on renewable energy alone.

‘This winter has shown us that we can have wind droughts that hit the entire east coast of Australia for days on end. We basically had all these wind turbines, which have cost billions of dollars, producing almost no power for extended periods.

‘To me this is the main problem I’ve got with this whole data centre boom and the whole notion that we can electrify everything in this country, because the government wants to shut down the only stable 24/7 power source that we have.

‘This also comes at the same time as Australia is the world’s biggest coal exporter. Of course, we sell that coal to Asia, which accounts for more than 70 per cent of the world’s coal consumption and 60 per cent of the world’s carbon emissions.’