OpenAI, NextDC seal MoU for $4,6B major AI hub in Australia

US-based artificial intelligence company OpenAI has signed a memorandum of understanding with Australian data center operator NextDC to develop an AI infrastructure campus in Sydney, the NextDC announced Friday.

The firm said in a statement that its partnership with OpenAI aims to build a hyperscale AI campus and a large-scale GPU supercluster in western Sydney. The two companies will jointly plan, develop, and operate the new facilities.

"The first phase will focus on NEXTDC's S7 hyperscale campus, making it one of the most advanced sovereign AI campuses in the Asia-Pacific region," the statement said.

According to Bloomberg, the agreement is valued at AU$7 billion ($4.6 billion). Shares of NextDC rose 4.1% in early afternoon trading following the announcement.

Australian authorities said the multibillion-dollar project is expected to generate thousands of direct and indirect jobs during the construction phase, while also creating long-term opportunities in technical, engineering, manufacturing, and operational fields.

The government noted that the AI center will rely on long-term renewable energy power purchase agreements and incorporate "next-generation" cooling technologies that do not require the use of drinking water.

"It's more proof Australia has the talent, clean energy potential, trade partnerships, and policy settings needed to be one of the big winners when it comes to AI," Treasurer Jim Chalmers said. "Partnerships like these will help create good jobs, boost skills, and spread AI adoption across our economy."