Published on the 16/09/2025 | Written by Heather Wright
New report serves up more figures to chew on…
The figures are big: Kiwi data centres underpinning $16.5 billion in ‘ICT GDP’ and enabling a further $76.5 billion in ‘knowledge-intensive services’, 56 data centres currently operational, 20 more planned or under construction, 30 new power projects and 102 in early planning, and a workforce set to double.
Two weeks on from the fiasco that was AWS’ Kiwi data centre launch, industry association NZTech has launched a ‘landmark’ report into the data centre business in New Zealand.
“They create high-value jobs, attract global investment and position us to lead in digital innovation, all while leveraging our renewable energy strengths.”
Empowering Aotearoa New Zealand’s Digital Future – Our National Data Centre Infrastructure says the data centre sector underpins $93 billion in economic activity and positions New Zealand as a global leader in sustainable digital infrastructure, offering opportunities ‘for us all’.
“By providing the essential infrastructure needed for cloud computing, AI and modern digital services, data centres support innovation and attract further investment.”
It’s a sector, the report says which is also a powerful engine for job creation, generating ‘high-value roles and building a strong pipeline for the construction industry’, with investment linked to investment in renewable energy as well.
The comprehensive report taps the idea that New Zealand could develop a new export sector, leveraging its renewable energy supply, politically stable environment and quality infrastructure to become a data centre powerhouse and a leader in sustainable data centre development.
NZTech is calling for the creation of a Data Centre Industry Ministerial Advisory Group bringing together data centre operators, electricity providers and government policymakers to improve information sharing, support long-term power planning, streamline approval processes and prioritise workforce development in order for New Zealand to ‘fully capture its digital opportunity’.
Graeme Muller, NZTech chief executive, says data centres are the ‘invisible engines’ of our digital world, fundamental to the smooth running of our modern lives.
He says data centres are more than just critical infrastructure for New Zealand.
“They create high-value jobs, attract global investment and position us to lead in digital innovation, all while leveraging our renewable energy strengths.”
There’s no doubt data centres are important. The expansion of cloud computing and digital services and the boon that is AI are driving global demand for next-generation infrastructure, including data centres, with established markets increasingly constrained by both space and resource availability.
The report isn’t the first to suggest New Zealand should capitalise on global demand for data centres. In June, legal group Minter Ellison – which has been advising on a number of data centre projects including the proposed Datagrid hyperscale development and the Tasman Ring Networks, DCI’s national rollout and strategic procurement and regulatory matters for major banks – said New Zealand was quickly gaining traction as a promising alternative to those constrained international markets.
“With an impressively high proportion of renewable electricity, improving international connectivity, a stable regulatory environment and a banking sector that is showing increasing interest in financing infrastructure, it presents a compelling opportunity for forward-looking digital infrastructure investment,” Minter Ellison says, adding that now it a ‘compelling’ time for investment opportunities in New Zealand.
The NZTech report says more than $10 billion will be invested into data centre growth over the next decade. A large amount of that appears to be courtesy of AWS’s promised $7.5 billion investment, though it’s unclear exactly how much has been factored into the $10 billion.
Microsoft’s data centre region reportedly included a $1.06 billion investment, with Google’s first cloud region estimated in the report to be a $500 million-plus investment, based on comparable Australian builds.
The report notes that while hyperscale cloud providers account for 90 percent of all the announced dollars, the figures cited often also include additional investments such as skills development and energy investments.
Domestic and Australian colocation providers, including CDC, DCI, Spark (with its $1 billion planned expansion) and Datacom are adding another $2-3 billion, with regional investments expected to add a further $1 billion.
The power question
Appropriately enough given the power-hungry nature of data centres, it wasn’t the minister for science, innovation and technology who fronted the event, but instead energy minister Simon Watts.
On the power front, the report says while data centres account for 0.6 percent of New Zealand’s current electricity demand that’s expected to more than double to a not insignificant 1.8 percent by 2030.
If, however, they manage to exploits an export market for AI-centric cloud capacity, that use could nearly quadruple to 2.2 percent of all of New Zealand’s electricity in the same timeframe.
Delphine Ducarage, NZTech chair, says unless data centre growth is supported by an equivalent growth in power generation and network infrastructure, the data centre opportunity can become a risk.
The report notes that Ministry of Business, Innovation and Employment figures show total national electricity demand is expected to reach around 50,503GWh by 2035.
“To meet this growing need, 30 new electricity generation projects are currently committed and underway, set to add 1,439MW of generation capacity or approximately 2,928GWh of additional electricity supply.”
A further 102 projects are being ‘actively pursued’ to deliver an additional 16,757 MW of capacity or around 48,683 GWh of additional annual electricity supply.
The report has a strong focus on sustainable data centre development, saying commitment to sustainability is driving major investment in clean energy projects with data centre operators partnering with renewable energy providers to expand New Zealand’s green energy capacity.
Talent and taxes
The report also notes the planned data centre builds will need a construction workforce of between 11,500 and 15,000, with a single facility requiring upward of 2000 construction jobs during its build. Once operational, however, data centres are highly efficient, employing just over 1000 people directly in data centre operations nationwide – that’s across the existing 51 data centres currently in operation, rather than just AWS’s offering.
But the report does note there are more workers required than just those directly employed by the data centres, with IT professionals working onsite for customers, workers supporting plant maintenance, power systems and security.
“In total, ongoing services in and around New Zealand’s data centres support an estimated 6,800 jobs. Looking ahead, the growth in data centres is expected to double the data centre workforce by 2030.”
That brings with it a risk of skills shortages impacting New Zealand’s digital infrastructure growth.
“Many roles are in short supply, leading to a heavy reliance on international talent.”
Tax revenues are also an area of discussion – albeit fairly briefly – in the report, which notes that large-scale data centre investment generates significant tax revenue, supporting public services and infrastructure.
It’s a contentious area with big tech quick to harness tax minimisation strategies to ensure they pay little taxes here.
Take AWS. Its financial records show that last year it paid just $4.9 million in taxes, with $435 million in local revenues logged in New Zealand and ‘paid’ nearly $307 million to an overseas sister company for ‘cloud service fees’ – suggesting there’s still plenty of work to be done to fully harness the benefits to New Zealand of data centres in terms of tax revenues. (An opportune time, perhaps, for Tax Justice Aotearoa and Better Taxes for a Better Future’s recommendations on tackling tax minimisation to be heeded.)
NZTech’s latest metrics for the tech sector – released just days before the data centre report – shows the sector contributes $23.8 billion to GDP and accounts for eight percent of the national economy. It also accounted for $11.4 billion in goods and services sold offshore, making it the country’s third largest export earner.
