Data centres and the long game: what global trends mean for New Zealand’s digital infrastructure future

From global insight to local reality

Over the past several years, DLA Piper has tracked the rapid evolution of the global data centre sector. Two key publications help frame where the market is heading and why these trends matter for New Zealand.

In 2022, DLA Piper published The meteoric rise of the data centre: Global data centre investment outlook highlighting the scale of capital flowing into the sector and data centres’ shift from niche real estate assets to core infrastructure. It reflected a growing consensus among investors, operators and policymakers that digital infrastructure was increasingly viewed as foundational to future economic growth.

That trajectory continued. In late 2024, TMT Finance (a specialist technology, media and telecommunications advisory firm), on behalf of DLA Piper, surveyed 176 senior executives for Navigating global growth in data centres – riding the AI wave. The results suggested artificial intelligence (AI) is reshaping demand, alongside ongoing cloud migration and edge computing, while power, land, labour and enabling infrastructure constraints are tightening in many markets.

From a New Zealand perspective, the relevance is clear: as hyperscalers and institutional investors expand globally, similar investment pressures, constraints and policy questions are increasingly playing out locally.

Recent developments in New Zealand underscore the point. Reforms to the Overseas Investment Act 2005 came into force on 6 March 2026, alongside a new Ministerial Directive Letter that signals a more risk-based and streamlined screening approach for lower-risk transactions. In Southland, a major datacentre campus and associated trans-Tasman subsea cable landing have now received resource consent. And in February, BCG described data centres as a strategic opportunity for New Zealand, calling for an enabling policy framework to help unlock investment at scale.

The question is not whether New Zealand will be affected by these dynamics, but how it responds.

 

Global trends shaping the sector: the macro view

At a macro level, several global trends are converging to reshape the data centre landscape.

First, demand continues to grow. AI workloads are widely seen as a major driver of future capacity requirements. Many market participants expect investment levels to increase further despite concerns about potential pricing bubbles in some regions.

Second, the investment profile of data centres has shifted. What was once viewed primarily as commercial real estate is now increasingly treated as core infrastructure. This has broadened the investor base to include sovereign wealth funds, pension funds and infrastructure specialists, often on a cross-border basis.

Third, regulation is playing a more central role. Data sovereignty, environmental, social and governance (ESG) reporting obligations, and sustainability requirements are influencing where and how data centres are developed, particularly in Europe and parts of Asia.

Finally, physical constraints are shaping market geography. In mature markets, shortages of land, power and grid capacity – combined with complex consenting and permitting regimes – are pushing investment towards secondary markets that can offer renewable energy, cooler climates and supportive policy settings.

These macro forces provide important context, but some of their implications are clearer when viewed through specific international examples.

 

Policy responses in key global markets

Around the world, governments are taking different approaches to enabling data centre growth.

In the United States, recent policy initiatives have framed data centre development as a matter of national competitiveness and security. There has been an emphasis on accelerating delivery, including streamlining permitting, prioritising workforce development and expanding power supply (including through fossil fuels and nuclear energy). The policy objective is to scale compute capacity to achieve global leadership in AI. President Trump, in his 25 February 2026 State of the Union address, also signalled a shift towards requiring data centres to meet their own electricity needs, to mitigate the strain on local grids.

Chile offers a contrasting model. Its National Data Center Plan, launched in 2025, is explicitly focused on sustainability and decentralisation. The plan includes a multi-stakeholder coordination framework, digital mapping tools to identify potential sites based on land and energy considerations, targeted workforce training and the development of renewable-powered AI campuses. The stated objective is to position Chile as a regional hub for sustainable digital infrastructure.

Australia sits somewhere in between. While it does not yet have a formal national data centre strategy, it has emerged as a highly active investment destination for the sector. At the same time, Australia is grappling with the challenge of meeting rapidly growing power demand during a broader energy transition. Energy Minister Chris Bowen recently stated that data centre developers should power their facilities with renewable energy generation, due to concerns about the strain data centres are placing on the grid. This highlights the potential risks of strong investment momentum without a coordinated policy framework.

In the United Kingdom, electricity costs and grid constraints have contributed to renewed interest in alternative energy solutions, including small modular nuclear reactors. While still emerging, these developments underscore how power availability is increasingly central to data centre location and design decisions.

 

What this means for New Zealand

Against this global backdrop, New Zealand faces a strategic choice about the role it wants to play in the Asia-Pacific data services market.

The foundations are strong. The digital sector already underpins significant economic activity and is forecast to attract further investment. New Zealand benefits from a high proportion of renewable electricity generation, a naturally cool climate, a stable regulatory environment and competitive data centre efficiency metrics. For global investors and hyperscalers with strong ESG mandates, these attributes are compelling. Recent turmoil in the Middle-East may also mean that investors pivot towards the safe, stable environment that New Zealand offers.

New Zealand is also well positioned geographically. While proximity remains critical for some digital activities, some AI-driven workloads can be less latency-sensitive. This can reduce the disadvantage of distance and create opportunities for New Zealand to support regional demand in specific use cases.

However, competitive advantages alone may not be sufficient. International experience suggests data centre development increasingly depends on coordinated policy settings across land use, energy, enabling infrastructure, investment and workforce development.

Recent reforms – including changes to the Overseas Investment Act 2005 and the ongoing overhaul of the resource management system – may help reduce friction for large-scale developments. The question is whether more targeted measures are needed to enable data centre growth specifically.

International examples offer useful options for consideration. For example:

• Chile’s digital site-mapping tools could help streamline site selection and identify opportunities for repurposing existing assets.
• Formalised coordination between energy providers, network operators, renewable developers and data centre proponents could help address power constraints more effectively.
• Focused workforce development initiatives could help ensure specialist skills are developed and retained locally.

The February 2026 report prepared by BCG, Data centres as strategic infrastructure: unlocking value for NZ Inc, also considered lessons New Zealand could learn from countries such as Ireland and Brazil. This underscores the breadth of experience New Zealand can draw on as it seeks to carve out its share of the data centre sector.

At the same time, New Zealand’s response will need to reflect domestic policy settings and values. Approaches that prioritise speed above all else, or that compromise long-standing environmental and cultural commitments, are unlikely to be durable. While conversations about long-term energy resilience – including emerging nuclear technologies – may arise over time, New Zealand’s renewable energy base remains a critical strategic asset.

 

The case for a New Zealand strategy

Global experience suggests there is no single blueprint for success in the data centre sector. A consistent lesson, however, is that jurisdictions seeking to compete for investment over the long-term benefit from clear, coordinated strategy and delivery settings.

New Zealand has an opportunity to learn from markets that are further along the curve – both from their successes and their constraints. Rather than adopting any one model, the challenge is to leverage New Zealand’s existing strengths while selectively adopting policy tools that have been effective elsewhere.

Data centres are increasingly essential infrastructure, with implications for economic resilience, digital sovereignty and long-term growth. Realising their potential in New Zealand will require leadership, coordination and ongoing work across energy planning, enabling infrastructure, land use and skills development.

The recent BCG report recommends a data centre acceleration package, including establishing an enabling policy framework. Without commenting on the specific components of that recommendation, we agree with the sentiment.

New Zealand needs to take ownership of its digital destiny and formulate a national strategy to help unlock its potential as a digital services hub. Absent a strategy, New Zealand risks becoming a passive participant in someone else’s plan. With clearer settings, it could shape a digital infrastructure pathway that aligns with New Zealand’s priorities and long-term interests.