Melbourne resident Sean Brown takes his 19-month-old son to the park, but their walk passes an imposing new building promoted as "Australia's largest hyperscale AI factory," a datacentre called M3. Brown dislikes the construction noise from its constant expansion, the looming towers, the persistent background hum, and the exhaust from the growing array of diesel generators that help power the server ranks inside. He worries what it represents for his child's future.
"He is growing – neurologically, pulmonarily, physically – in the shadow of a facility whose cumulative environmental impact … has never been assessed," Brown says. "They're building something which is, frankly, terrible for the community. There's no upside to it and it's just getting worse."
The centre has expanded several times, fuelling the endless appetite of digital services and generative AI. By the end of 2027, if fast-track planning approval is granted by the Victorian government, this datacentre less than 10km from the Melbourne CBD will double in size to cover 10 hectares, drawing 225MW of power and running 24/7. Diesel generators on site are reportedly expanding from 40 to 100 at completion.
Eight months ago, NextDC's chief executive, Craig Scroggie, posted a video of the M3 site on LinkedIn, calling the speed and scale "stunning." "We're building Australia's largest hyperscale AI factory purpose-built for the new AI era of accelerated computing," he wrote. "This is how we build Australia's digital future: speed, scale, sovereign, sustainable & secure."
Australia is under pressure to compete in the growing datacentre industry amid promises of an AI boom. New investments are hailed as vital downpayments on the country's economic future. But those living closest to these massive data halls feel their neighbourhood peace is being sacrificed on the altar of progress.
Guardian Australia spoke to residents in three states about their concerns, emblematic of growing opposition across the country. Those living closest to datacentres argue they should be moved further away from residential areas in major cities. The M3 datacentre is "just a really inappropriate location for what is pretty much [an] intensive industrial building," Brown says. "It's right next to people's houses." Brown works in tech and understands the need for datacentres but argues the boom needs better planning. "It's like they've just gone: 'Let's just maximise this and don't even consider the impact,'" he said.
A NextDC spokesperson says the project is delivered in accordance with local and state government processes and regulatory requirements, with processes to manage and respond to feedback. The Maribyrnong local council has expressed opposition to the expansion but awaits planning approval from the Victorian government. A spokesperson for the Victorian planning minister, Sonia Kilkenny, said the proposal is under consideration and it would be inappropriate to comment further.
Council 'Sidelined'
Near Lane Cove River, 9km from the Sydney CBD, a proposal for a new 90MW datacentre named Project Mars is being considered by the NSW government. It would be the fourth in the area; datacentres occupy 40% of local industrial zones. The council argues the nearly 22,000sqm, three-storey centre exceeds height limitations and would be visually prominent next to bushland and residential zones.
Local resident Daniel Bolger says it will sit next to what he calls "the lungs of Lane Cove: Blackman Park." The park, once a tip, is now a sporting hub "used by 50% of the suburb" each weekend. "[Now] they're going to put datacentres right next to it." Bolger says the council has been sidelined, and there are community concerns over proximity to schools and the pure power draw. "This is the cluster issue," he says.
The NSW planning minister, Paul Scully, says the public are encouraged to have their say during consultation, and a full merit-based assessment, including an assessment of energy needs, will be conducted before a decision. "Datacentres are an important part of the infrastructure and digital architecture of modern economies," he says. The developer, Goodman Property, did not respond to a request for comment.
'It's Huge'
In Hazelmere, 15km east of Perth, Western Australia, community opposition is growing to a planned 15,000sqm, three-storey, up-to 120MW datacentre. "It's huge. Bigger than a Bunnings warehouse," says Kate Herren, a local resident and fundraising coordinator for Trillion Trees Australia. "The location we feel is wholly unsuitable for a proposal of [this] size and scale."
Walter McGuire, chair of the Bibbul Ngarma Aboriginal Association, says the Noongar people have a role to care for the Mandoon Bilya (Helena River). "Giant datacentres belong in industrial areas, not on the banks of our rivers and wetlands. [It] is a culturally significant river, and the wetlands that surround it … So we have grave concerns about its impact on the river and the surrounding ecosystem."
The proposal is before the council. A City of Swan spokesperson said it was unable to comment. A GreenSquareDC spokesperson, the company behind the project, said it is in an established industrial area with major transport and power infrastructure. "We clearly understand there is interest in this proposal given its proximity to existing businesses and the local school. These considerations are taken seriously, and GreenSquare is committed to engaging constructively throughout the planning process."
'Critical Infrastructure' in Industrial Zones
Data Centres Australia's chief executive, Belinda Dennett, says the industry is aware construction can be confronting "particularly where industrial zoned land meets with residential areas," but maintains developers meet strict environmental and building standards and seek to minimise disruption. She says Australia has a "significant opportunity" to benefit from datacentre investment through new businesses and jobs. "These benefits will flow to the local communities that neighbour datacentres too."
On Friday, she told a NSW parliamentary inquiry that if Australia does not develop its own AI infrastructure, it will become "an importer of someone else's technology, that has no Australian culture, values or laws built into that." The alternative, she said: "we build that here and we have some say [and] control over what that looks like."
This article was amended on 3 May 2026. An earlier version incorrectly said a NextDC, rather than a Goodman Group, datacentre development proposal would put a campus next to Blackman Park oval.
