Australia should learn from the giant LNG boom of the 2000s as the country readies for a deluge of investment into data centres, HSBC chief economist Paul Boxham says.
Capital spending on technology tripled in the year to March driven by construction of data centres to train and run artificial intelligence.
The wave of cash sent business investment soaring but also required significant imports of equipment.
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The economic impact remains modest so far and Mr Bloxham said it remained unclear whether the long-term benefit will be substantial.
“Whether it significantly benefits the local economy will partly depend on successful AI adoption by local businesses that lifts their productivity. So far this has been slow,” he said in a research note.
Another way the AI boom might drive growth would be Australian exporting compute — that is, processing power — overseas, Mr Bloxham said.
Yet there’s already concern about energy and water needed for data centres, profits potentially flowing overseas and a lack of jobs.
“There are similarities to the LNG boom . . . (where investment) summed to around $300 billion over five years ” Mr Bloxham said.
“Australia no doubt benefited from the LNG boom overall, as it drove exports and tax revenues. But there were winners and losers.”
Exports of gas boosted living standards and drove rising wealth but debate is still raging years later as to whether tax payments are sufficient and whether local gas users have been left behind.
Mr Bloxham said politicians should learn from those ongoing debates.
“Policymakers ought to carefully assess the implications for local energy and water, what this will mean for other industries and communities, and whether the benefits of having lots of data centres are sufficiently large to warrant the costs,” he said.
“Tax and regulatory policy are both important, and setting the ground rules early has benefits.”
The Bank of International Settlements — the global institution connecting central banks — on the weekend warned AI’s ongoing advance would have an uncertain impact on jobs.
BIS’s annual economic outlook said AI would be different to previous technological booms sparked by the steam engine and electrification.
“If, at some point, AI systems can improve their own capabilities and create technology and ideas, the macroeconomic consequences could be profoundly different from past innovations,” the report said.
It warned AI’s development might also divert income from workers and erode consumer spending.
Anthropic — the tech company behind the Claude AI platform — earlier in June called for a pause on development of the software, then released a controversial update within days.
Experts dubbed the godfathers of modern AI, including Yoshua Bengio and Geoffrey Hinton, have also sounded the alarm that the technology could become a threat and that developers will likely lose control.
