How US Trade Tariffs, the AI Diffusion Framework and Currency Tailwinds Are Steering AI Infrastructure to Australia

Why Global AI Investment Is Pivoting Toward Australia

A strategic briefing for technology leaders on the global forces reshaping AI infrastructure and why Australia is emerging as a high-performance launchpad.

Australia is rapidly positioning itself as one of the most attractive destinations for building the next generation of AI infrastructure from AI Factories and Neo Cloud platforms to high-density GPU data centres.

Several macro trends are converging to shift global infrastructure strategies, and Australia is at the centre of that momentum. In this briefing, we unpack the forces driving this shift and explain why global AI leaders are choosing Australia as the next frontier for infrastructure investment.

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Shifting US Trade and AI Export Controls

New U.S. restrictions are making it harder to deploy advanced AI chips in some regions. Australia offers a neutral, reliable alternative.

Favourable Currency Exchange Rate (USD vs AUD)

The strong U.S. dollar means your investment goes further in Australia helping your organisation reduce costs without compromising quality.

Geopolitical Stability & Regulatory Readiness

Australia’s stability and regulatory alignment give your organisation long-term confidence to scale AI infrastructure without geopolitical or compliance uncertainty.

Performance, Latency & Market Reach

Australia delivers the low-latency performance and regional reach your organisation needs to power real-time AI workloads across Asia-Pacific and beyond.

Connectivity and Global Reach: Built to Scale Across Borders

With direct access to subsea cable landing stations and global cloud on-ramps, Australia enables rapid scaling of AI workloads across borders — spanning Asia-Pacific and the Americas.

Global forces are aligning in Australia’s favour, creating a rare and timely opportunity for AI infrastructure investment.

For hyperscalers, enterprise AI platforms, and fast-scaling GPU cloud providers, this moment represents a strategic inflection point. As markets like the U.S., Japan, and Taiwan contend with rising costs, regulatory complexity, and geopolitical risk, Australia is standing out as a stable, scalable, and globally connected launchpad for AI, particularly across the Indo-Pacific.

This briefing explores the macro trends reshaping AI infrastructure decisions, and why an increasing number of global technology leaders are choosing to build the future of AI in Australia.

Shifting US Trade and AI Diffusion Policies

In early 2025, the United States introduced a broad wave of new trade tariffs, and Taiwan, one of the world’s top technology exporters, was hit hard. A 32% tariff was placed on many of its exports, which sent shockwaves through global supply chains and raised red flags for companies that rely on Taiwanese manufacturing for advanced tech hardware¹.

Now, to be clear, AI chips themselves (like those made by TSMC or used in NVIDIA systems) are currently exempt from these tariffs². But the bigger picture still creates uncertainty. The message to the market is clear: the US is tightening control over the flow of critical technology. And that has ripple effects far beyond just the tariff list.

On top of that, the US also introduced new export controls on AI technology, known informally as the “AI Diffusion” rules. These rules come into effect on May 15, 2025, and they mark a significant shift in how high-end AI hardware and software can be shared internationally. Under these new rules, part of an interim regulation issued by the U.S. Department of Commerce, any company wanting to export powerful AI chips or certain large AI models (like ChatGPT-scale systems trained on massive datasets) must now apply for an export license³⁴.

What counts as a “large AI model”?
Think of models trained to generate text, video, or images, tools behind generative AI, self-driving cars, or predictive healthcare systems. Because they require huge computing power and can be used in sensitive applications, these models are now treated as strategically controlled technology.

Australia’s Tier 1 Advantage

Here’s where Australia gets a big boost.

The U.S. has introduced a three-tier framework to classify which countries can access this kind of tech more easily. Australia sits right at the top, in Tier 1, alongside other trusted allies like the UK, Japan, South Korea, Taiwan, and EU members⁵.

That Tier 1 status means:

• Exports of advanced AI chips to Australia are pre-approved by default
• U.S. suppliers can use a “general license exception,” which speeds up delivery and cuts red tape⁶
• As long as the chips stay in Australia and aren’t resold to restricted regions, no extra license is required⁷

Why It Matters

This gives Australia a serious supply chain advantage.

For companies building AI Factories or launching GPU-as-a-Service platforms, choosing a Tier 1 destination like Australia means easier access to the world’s best chips, including NVIDIA’s A100, H100, and future Blackwell GPUs, without the delays or complications that come with non-Tier 1 countries⁸.

It also ensures compliance with U.S. regulations by design, which is increasingly important for organizations operating across borders or targeting global customers.

Most importantly, it makes Australia one of the few places outside the U.S. where AI infrastructure can be deployed quickly, legally, and without compromise, making it a smart launchpad for globally minded platforms that want to serve customers across the Indo-Pacific and beyond.

Currency Tailwinds (USD vs AUD)

Beyond policy and supply chain advantages, one of the most practical — and powerful — reasons companies are eyeing Australia for AI infrastructure is currency.

Right now, the U.S. dollar (USD) is strong, while the Australian dollar (AUD) is comparatively weak. And that creates a huge opportunity for global investors, especially those pricing their budgets in USD⁹.

What Does That Mean in Simple Terms?

Let’s say you’re a U.S.-based tech company. If 1 USD gets you 1.5 AUD, then every dollar you spend in Australia goes further. The same server room, network build, or engineering team might cost 20–30% less in Australia than it would in the U.S. just because of the exchange rate.

For businesses funding AI projects, like building a GPU cloud, scaling an AI Factory, or launching training clusters, that difference matters. It lowers both:

• CAPEX (Capital Expenditure): You save on upfront costs like land, construction, hardware, and setup.

• OPEX (Operating Expenditure): You also reduce ongoing expenses like electricity, maintenance, cooling, and staff¹⁰.

A Boost for Export-Led Services

And it’s not just about saving money, it’s about winning business.

When Australia prices AI services (like GPU-as-a-Service, cloud hosting, or AI training workloads) in AUD, those services become more affordable for international customers. That makes Australia an attractive hub for exporting AI services globally, especially to fast-growing markets across Asia and beyond¹¹.

Why It Matters

In short, the USD/AUD exchange rate acts as a financial tailwind for investors.

It improves Australia’s cost profile. It makes high-performance AI infrastructure more affordable to build and run. And it helps digital platforms deliver competitively priced services to global customers, all from a region known for its stability and trust.

For organisations looking to scale quickly, stay cost-efficient, and protect their margins, this exchange rate advantage is more than a bonus, it’s a strategic edge.

Geopolitical Stability & Regulatory Readiness

When investing in AI infrastructure, predictability is as crucial as performance. Beyond power, cooling, and costs, you need assurance that your infrastructure is future-proofed against geopolitical shocks and regulatory turbulence. 

This is where Australia sets itself apart.

A Safe Bet in an Uncertain Region

The Asia-Pacific region holds immense opportunity—but it’s also home to complex geopolitical dynamics. From cross-strait tensions near Taiwan to evolving power shifts in Northeast Asia, long-term certainty is not guaranteed everywhere.

Australia, in contrast, is a beacon of stability. It boasts:

• A robust and independent legal system

• Transparent and consistent policy frameworks

• Strategic partnerships with key tech nations like the US, UK, Japan, and the EU

• Participation in global alliances like AUKUS and QUAD, reinforcing its role in digital security and regional trust

This makes Australia an attractive, low-risk destination for companies building mission-critical AI platforms whether that’s hyperscale data centres, sovereign cloud zones, or GPU-as-a-Service (GPUaaS) workloads.

Compare that to some other regions:

• Taiwan, for example, faces increasing uncertainty due to cross-strait tensions with China.

• South Korea and Japan are both highly developed markets but are located in a geopolitically sensitive region.

• The U.S., while stable domestically, is often at the centre of global trade disputes, which can affect international tech flows and compliance obligations.

Regulatory Alignment with the West

Australia doesn’t just offer a stable operating environment—it aligns with how global tech leaders operate. It plays an active role in shaping digital governance, and its policy frameworks reflect the same values and principles as those in the U.S. and EU.

• Data privacy and protection: Strong enforcement under its Privacy Act and SOCI legislation

• Cybersecurity and critical infrastructure: Backed by national certifications and hosting frameworks

• AI regulation readiness: In step with the EU AI Act and U.S. export controls via the Bureau of Industry and Security

• Built to world-class specifications: Australian data centres are constructed to exceptionally high engineering and resilience standards, especially in capital cities where uptime, security, and sustainability are critical.

And among them, NEXTDC stands apart as:

• Australia’s only nationwide data centre operator, with presence in every major capital city

• One of Australia’s only operators to hold both NVIDIA DGX-Ready certification and Uptime Institute Tier certifications

• A proven provider of super high-density, liquid-cooled AI infrastructure, designed to meet the most demanding GPU workloads

Australia is also developing a national AI strategy to support sovereign infrastructure, innovation, and responsible regulation.

This combination of engineering excellence and regulatory alignment makes Australia and NEXTDC a trusted launchpad for global AI infrastructure.

Bottom Line

If you're building AI platforms that demand global compliance, low operational risk, and cutting-edge performance, you need infrastructure that’s ready for the future.

Australia offers the stability, standards, and strategic alignment global AI leaders require and NEXTDC delivers the infrastructure to match.

Whether you’re scaling a Neo Cloud platform, deploying sovereign AI services, or enabling high-density GPUaaS, NEXTDC gives you the confidence to build boldly and operate globally.

Performance, Latency & Market Reach

For any AI infrastructure, especially when delivering real-time services like fraud detection, autonomous vehicles, or conversational AI, latency matters.

Latency is the time it takes for data to travel from one point to another. In the world of AI, milliseconds can make or break the experience. So, the question is: Can Australia deliver the speed and responsiveness modern AI applications need?

A Well-Connected Digital Hub

Yes, and increasingly so.

Australia is becoming one of the most digitally connected countries in the region and that’s good news for anyone building AI infrastructure.

A growing number of high-capacity subsea cables link Australia directly to major global markets, including:

• Singapore and Southeast Asia via the Australia-Singapore Cable (ASC) and INDIGO system

• The U.S. West Coast through the Southern Cross and Hawaiki cables

• The Middle East and Europe via the Oman Australia Cable (OAC)

These cable systems provide fast, high-bandwidth connectivity between Australia and key regions. For organizations delivering AI workloads, it means data can travel quickly between continents supporting everything from real-time AI services to training and inference at global scale.

In short: Australia is no longer isolated; it’s a powerful digital gateway between the East and West.

Regional Proximity to High-Growth Markets

Australia sits just below the equator, giving it a unique geographic advantage. It’s close enough to serve New Zealand, Indonesia, Singapore, and other parts of Southeast Asia, while also offering a neutral platform for companies that want to avoid hosting their AI infrastructure in more politically sensitive areas.

This makes Australia an ideal location for:

• Inference workloads serving users across Asia-Pacific

• AI training clusters that sync globally

• Sovereign AI deployments that require regional hosting

And for companies launching in Asia for the first time, Australia offers a safe, English-speaking base with legal certainty, before expanding into more complex jurisdictions.

Bottom Line

Australia is not just fast, it’s fast enough for high-performance AI, and uniquely placed to serve Asia-Pacific’s next billion users.

It combines global-class connectivity with regional reach, offering a strategic balance between performance, neutrality, and compliance.

Connectivity and Global Reach: Built to Scale Across Borders

One of Australia’s biggest advantages isn’t just what’s inside its borders, it’s how well connected it is beyond them.

Over the past few years, Australia has rapidly expanded its network of subsea cables, linking directly to major global data and technology hubs including the United States, Southeast Asia, Japan, and the Middle East. These high-capacity fibre routes significantly reduce latency and increase bandwidth, making Australia a true digital bridge between East and West — and an ideal location for launching AI infrastructure at global scale.

Key subsea routes already live:

• Southern Cross NEXT – connects Australia to the U.S. West Coast

• Australia-Singapore Cable (ASC) and INDIGO – links into Southeast Asia

• Oman Australia Cable (OAC) – a fast route from Perth to the Middle East and Europe

New cables coming online:

• SMAP (2026) – coastal cable enhancing domestic subsea coverage

• Google’s Bosun & Interlink (2025–2026) – linking Darwin, Melbourne, and Perth to Asia

• Google’s Tabua – connects Australia to Fiji and the U.S. via the Sunshine Coast

• Meta’s Waterworth (by 2030) – planned to connect the U.S., Brazil, South Africa, India, and possibly Darwin

For hyperscalers and Neo Cloud platforms, this means not just faster connections — but strategic reach. Australia’s infrastructure gives AI workloads the global reach they need, with the reliability and low latency today’s real-time services demand.

For AI inference, GPU workloads, and cloud applications, this means fast, reliable performance for users not just in Australia, but across APAC and beyond.

Combined with the country’s cloud-neutral data centre ecosystem and its close ties to the world’s major cloud providers, Australia offers true global reach, with the agility to scale where your customers are.

Conclusion: Why Australia — and Why NEXTDC

The global race for AI infrastructure is accelerating — and Australia is now one of the world’s most strategic destinations to build and host AI Factories and GPU-as-a-Service platforms.

Australia offers the stability, sustainability, and strategic edge needed to scale AI infrastructure. And with NEXTDC you're not just building data centres. You're building the future.

Here’s why:

• National AI-Ready Platform
  NEXTDC operates Tier III+ certified, 100% uptime SLA data centres in every major Australian capital city — including Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra and Darwin.
• Expanding Across Asia
  With new sites launching in Tokyo and Kuala Lumpur, NEXTDC is building a consistent, high-performance infrastructure platform across Asia-Pacific, ideal for hyperscalers and Neo cloud providers scaling GPU-as-a-Service globally.
• Built for High-Density AI Compute
  NEXTDC will be the first in Australia to host NVIDIA GB200 infrastructure, supported by our in-house engineering expertise. As a NVIDIA DGX-Certified provider, we deliver AI-ready environments with scalable power, advanced liquid cooling, and custom-built infrastructure designed to meet the evolving demands of GPU-intensive workloads.
• Trusted by Leaders Like SharonAI
  Organisations like SharonAI rely on NEXTDC to deliver operational certainty, performance at scale, and seamless interconnectivity for mission-critical AI workloads.
  
   See how SharonAI powers GPU-as-a-Service with NEXTDC
  
  
• Recognised and Award Winning
  • PTC 2025 Innovation Award - Best Data Centre Platform   
  • Frost and Sullivan - Recognised for excellence in customer value, innovation and growth
  • NVIDIA DGX-Certified infrastructure
  • Uptime Institute Certified - Tier IV data centres across Australian capital cities.
    
    
• Cloud-Neutral with Global Reach
  NEXTDC’s platform supports interconnects up to 100Gbps, with access to all major cloud on-ramps and subsea landing stations giving you full flexibility to scale across borders.

Want to Learn More

Let’s Talk AI Deployment
Ready to build or expand your AI infrastructure footprint in Australia or Asia?

Whether you're designing your next AI Factory, scaling GPU cloud capacity, or entering the Australian or Asia market for the first time, NEXTDC is ready to help.

Contact the NEXTDC team to discuss how we can design your AI-ready deployment with confidence, flexibility, and speed.

References & Sources

1. Reuters. U.S. imposes 32% tariffs on Taiwanese imports, raising global tech supply chain concerns.
https://www.reuters.com/world/us-slaps-tariffs-on-taiwan-imports-2025-02-13

2. Reuters. Semiconductors exempted from new U.S. tariffs in 2025 trade policy update.
https://www.reuters.com/technology/semiconductors-exempt-us-tariffs-2025-02-14

3. Perkins Coie. U.S. Department of Commerce Releases Interim Final Rule on AI Export Controls (January 2025).
https://www.perkinscoie.com/en/news-insights/us-commerce-department-ai-export-controls.html

4. Perkins Coie. AI Diffusion Rule Expands Licensing for AI Chips and Large Models
https://www.perkinscoie.com/en/news-insights/understanding-the-ai-diffusion-export-controls.html

5. Covington & Burling LLP. Commerce’s Interim Rule on AI and Chip Export Controls – Country Tiers and License Policies (2025).
https://www.cov.com/en/news-and-insights/insights/2025/01/us-commerce-department-announces-ai-chip-export-controls

6. Perkins Coie LLP. New AI Export Controls: License Exception for Tier 1 Countries (January 2025).
https://www.perkinscoie.com/en/news-insights/us-commerce-announces-export-controls-on-ai-models-and-chips.html

7. Perkins Coie LLP. Artificial Intelligence (AI) Interim Final Rule – End-Use and Re-Export Conditions Explained (2025).
https://www.perkinscoie.com/en/news-insights/interim-final-rule-on-export-of-ai-chips.html

8. Perkins Coie LLP. U.S. BIS AI Rule: Tier 1 Nations and Access to Advanced Chips (2025).
https://www.perkinscoie.com/en/news-insights/us-commerce-department-export-controls-nvidia-ai-chips.html

9. Reserve Bank of Australia (RBA). Exchange Rates – Monthly Average Rates. Retrieved April 2025.
https://www.rba.gov.au/statistics/frequency/exchange-rates.html

10. CSIRO & AEMO. GenCost 2023–24: Renewable Energy Costs and Comparative Energy Economics in Australia. Retrieved April 2025.
https://www.csiro.au/en/news/All/News/2024/GenCost-report-shows-renewables-are-cheapest

11. Reserve Bank of Australia (RBA) – The Role of the Exchange Rate in Australia’s Economy
https://www.rba.gov.au/education/resources/explainers/exchange-rate.html