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Locals question $3bn AI data centre being built in their backyard

The Datagrid project promises to bring new jobs, with efficient technologies to combat concerns around water and electricity use. Some locals aren't so sure. (Source: Q and A)

Residents of a small Southland town are banding together to ask questions about a new US$3 billion AI data centre being built in their backyard.

"We're not anti-technology, we're not anti-progress, and we're not even anti-data centres. We're just anti-no transparency," said campaigner Kelly Blomfield.

"I feel like the people of Southland were not given the chance to said whether or not this project would be something they would back."

A 49-hectare hyperscale data centre has been approved in the town of Makarewa, north of Invercargill, after crown agency Invest NZ pitched overseas investors to make a home for AI growth in New Zealand to the value of $30 billion.

Data centres support internet services like cloud storage, online banking networks, and artificial intelligence tools.

A rendering of the US$3 billion hyperscale facility in Southland.

New Zealand was already home to 56 data centres, with another 20 planned.

Datagrid's Makarewa facility would become the country's largest data centre yet and, once operational, was expected to become New Zealand's second-largest electricity user - taking 6% of the country's total power supply.

Blomfield was trying to organise a public meeting for concerned locals to ask questions about how the Datagrid facility would impact them.

The local council has agreed to take part but Datagrid has yet to respond.

"It's all being built for overseas interests," said Don Christie, the director of Wellington-based software company Catalyst.

Don Christie, director of Wellington-based software company Catalyst.

"The impact on us is going to be to make renewable energy far more expensive ... that's what's happened everywhere else in the world [where data centres have been built]."

While data centres are big business globally, protests took place in the US this weekend focused on the electricity and water demands data centres place on local communities, and a perception that data centres were being built without local buy-in.

Graeme Muller, the chief executive of Tech NZ, was confident the environmental issues seen in data centres overseas can be avoided here.

Tech NZ chief executive Graeme Muller.

He said newer data centres, like the one Datagrid was building, have more sustainable, "closed-loop" water processing systems.

When it comes to electricity concerns, he saw the introduction of a new, large user into the market as leading to more energy supply, not less, because investors would want to guarantee uninterrupted electricity for their investment.

"How do we take the opportunity of the trillions of dollars being spent on building this infrastructure around the world to build [a data centre] that underwrites our electricity system ... All smart governments are doing it."

In a report, Invest NZ highlighted Southland as one of the desirable regions for data centres due to its natural advantages of abundant renewable energy.

For the full story, watch the video above

Q+A with Jack Tame is made with the support of New Zealand On Air

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