Victoria’s push to secure a foothold in the fast-moving AI economy has taken a step forward, with the State Government outlining early measures designed to expand data-centre capacity and prepare the local workforce for rapid technological change. The announcement has set off a broader debate about whether the state is moving quickly enough to keep pace with national competition.
The Government has committed $5.5 million to position Victoria as Australia’s data-centre hub, backed by a Sustainable Data Centre Action Plan that aims to steer major construction into locations where energy, transport and water use can be supported sustainably. The plan is expected to help unlock a pipeline of projects valued at up to $25 billion in capital expenditure.
Alongside the infrastructure focus, the Government is setting aside $8.1 million to retrain and advance tech professionals so they can transition into AI roles. The aim is to protect existing jobs while preparing workers for the next wave of digital employment. It will work with TAFEs to develop training across construction, operations and digital roles linked to the sector.
Minister for Economic Growth and Jobs Danny Pearson said the strategy is designed to build opportunity across the state. “This is about creating jobs for Victorians—and protecting existing jobs by doing what we do best—educating and upskilling.” He added, “We are delivering the first plan of its kind in Australia—and we’re making sure our people are at the forefront.”
Melbourne already hosts the largest concentration of AI firms in the country along with 40 data centres. Recent private investment includes NEXTDC’s $2 billion digital campus at Fisherman’s Bend, expected to create thousands of roles across tech, AI, digital infrastructure, defence technology and advanced research. The Government estimates that AI advancements could add up to $30 billion to the state economy over the next decade.
The Opposition argues the announcement lacks the depth and direction needed for Victoria to stay competitive. In a statement, it said the package “lacks the scale, focus and ambition needed to compete with other Australian states,” pointing to New South Wales’ Innovation Blueprint 2035, which sets a 10-year strategy to attract $27 billion in investment and create nearly 100,000 high-value jobs. According to the Opposition, NSW’s new Investment Delivery Authority is designed to cut approval times and give major investors more certainty.
Shadow Minister for Manufacturing and Innovation Richard Welch said the Victorian funding does not meet the scale of the opportunity. “This is a rushed and underwhelming announcement from a tired Labor Government that doesn’t understand AI, has come 5 years too late to the opportunity; and hasn’t even begun the work of creating competitive advantage.” He also noted NSW’s more substantial approach, saying the state’s plan is backed by long-term ambition.
Welch added that Victoria’s tight budget position is a barrier to deeper investment. “With Victoria’s net debt growing by $2 million an hour, it is clear Labor cannot afford to make a serious commitment to seize the economic opportunity AI presents—leaving all Victorians worse off.”
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