Resource consent has been granted first “AI factory” to be constructed at Makarewa near Invercargill.
Resource consent has been granted for New Zealand’s first “AI factory” to be constructed at Makarewa near Invercargill.
The project will see the construction of a 78,000 sqm AI-focused data centre campus designed to support high-density GPU clusters for artificial intelligence training, inference, and high-performance computing workloads.
Datagrid NZ had previously indicated it was aiming to open the first phase of its US$2 billion (NZ$3.5b) data centre at Makarewa by 2028, but at that point was still waiting for resource consent, which has now been granted.
Once operational, the facility is expected to consume 280 MW of power, making it the second-largest electricity user in New Zealand after the Tiwai Point aluminium smelter.
The campus will be connected to the national grid.
Datagrid NZ say the development will generate more than 1200 construction jobs during the build phase while also establishing Southland as a new digital infrastructure hub.
“We extend our sincere gratitude – ngā mihi nui – to the iwi, landowners, local councils, and the Southland community for their unwavering support throughout this process,” Rémi Galasso, founder and CEO of Datagrid New Zealand, said.
“This approval is the result of years of dedication and collaboration, and we are excited about the transformative impact this project will have on Southland and New Zealand as a whole.”
The approvals were granted by the Southland District Council, Environment Southland, and Invercargill City Council.
So why has Southland been chosen for the major development?
Datagrid argues that New Zealand’s political stability, abundant renewable energy, and cool climate provide strong advantages for hyperscale AI infrastructure.
The company has highlighted Southland’s average annual temperature of around 9.8°C, which allows extensive use of natural cooling and can significantly reduce energy costs compared with warmer data centre hubs in Australia or Asia.
The site sits close to major high-capacity transmission lines originally developed to support the nearby Tiwai Point smelter, providing access to substantial power capacity that could support large-scale AI deployments.
Alongside the data centre approval, Datagrid confirmed that the Tasman Ring Network landing at Oreti Beach has also received full approval.
The subsea cable project is designed to deliver the first international cable landing on New Zealand’s South Island, providing direct global connectivity to support large-scale compute infrastructure.
The cable is part of a broader network architecture intended to improve international connectivity across the Tasman region while supporting the growth of hyperscale infrastructure in both New Zealand and Australia. Datagrid said the integrated development of both a hyperscale AI campus and international cable landing will help position Southland as a strategic location for digital infrastructure investment.