As of this week, the national grid operator, Transpower, says it\u2019s still in an investigative phase. <\/p>\n
That\u2019s no small detail, given phase one of the data centre would use a peak 280 megawatts, with plans to scale up to 1 gigawatt (1000MW)<\/p>\n
For context, Rio Tinto\u2019s aluminium smelter at Bluff requires 572MW of power, or around 13% of New Zealand\u2019s national supply or the equivalent to powering around 680,000 homes.<\/p>\n
Datagrid was first proposed by its Singapore backers in 2020, when it seemed that Rio Tinto was going to walk away from the smelter, leaving a huge amount of power going begging.<\/p>\n
Transpower has made encouraging noises about the data centre build. It says 17 power projects, generating a total 3.4GW are in the delivery stage with another 14GW in application stages.<\/p>\n
But assessing Datagrid\u2019s \u201cAI factory\u201d and an associated new sub-station (which Datagrid will have to foot the bill for) is a complicated process, which has already been underway for a year, and has an open-ended timeline.<\/p>\n
\u201cThis application is currently in the \u2018investigation stage\u2019 where we carry out steps such as assessing technical requirements, evaluating network impacts, and determining the feasibility and scope of the proposed grid connection,\u201d Transpower grid development executive general manager Matt Webb told the Herald. <\/p>\n
\u201cOnce these details are agreed upon, and Datagrid commits to a Transpower Works Agreement to design and build the grid connection, the indicative timeline is two years.\u201d<\/p>\n
On the retail side, Mercury has signed an option to supply Datagrid with 140MW over 15 years.<\/p>\n
Mercury chief executive Stewart Hamilton told Tech Insider: \u201cThe PPOA [power purchase option agreement] reflects that the data centre is currently in the development stage and gives flexibility in advance of a final investment decision.\u201d<\/p>\n
2. Funding<\/p>\n
By New Zealand standards, $5 billion is a big chunk of change to spend on a data centre.<\/p>\n
That\u2019s around five times what Microsoft spent on its giant data centre at Westgate in northwest Auckland.<\/p>\n
So how\u2019s the fundraising going?<\/p>\n
\u201cStill working on it,\u201d Datagrid founder and executive Remi Galasso messaged Tech Insider earlier this week.<\/p>\n
The former French telecommunications executive has favoured laconic updates.<\/p>\n
Notably, he has defied the odds before, raising hundreds of millions for the 15,000km Hawaiki Cable that has linked New Zealand with Australia, the US and several Pacific islands since 2018 (in 2021, Hawaiki was sold to Singapore\u2019s BW Group \u2013 which today owns 37.5% of Datagrid, with Galasso\u2019s family trust holding 62.5%, according to an OIO application).<\/p>\n
With help from fellow Hawaiki Cable directors Tex Edwards and Malcolm Dick, he succeeded where rich listers Rod Drury, Sam Morgan and Sir Stephen Tindall failed in their bid to raise capital for their Pacific Fibre project.<\/p>\n
Another factor in Galasso\u2019s favour: Nvidia and others have also made tens of billions in funding available to LLM makers and data centre builders under vendor financing (or what the more cynical call \u201ccircular financing\u201d). But we could be coming to the tail end of that cycle.<\/p>\n
3. An international cable<\/p>\n
Invercargill is a modest market for artificial intelligence, which on the face of things would make Galasso\u2019s capital-raising drive more challenging.<\/p>\n
But that\u2019s where the Tasman Ring Network comes in \u2013 a companion project that would see a fibre optic cable connect Bluff with Sydney, Melbourne and Hobart, with a connection from the Australian East Coast to Auckland then on to New Plymouth and Greymouth.<\/p>\n
In Auckland, data centres are clustered in the northwest to be close to existing international cables and New Zealand\u2019s main internet peering exchange.<\/p>\n
Chorus COO Drew Davies and CEO Mark Aue with Datagrid CEO Perrine Dhalluin and founder Remi Galasso in December 2024 as the two companies signed an MoU for the Tasman Ring project. Chorus later walked away from the project, citing lower-than-anticipated demand from anchor customers. Photo \/ Chorus<\/p>\n
\u201cThe cable is essential for the data centre,\u201d a Ministry of Business, Innovation and Employment (MBIE) briefing published in June 2025 stated. <\/p>\n
It would allow Datagrid to sell its capacity to the world.<\/p>\n
\u201cThe Tasman Ring is expected to be operational in 2027 and have a capacity of 540 terabits per second, allowing for data-intensive operations associated with training [artificial intelligence or AI] large language models,\u201d the MBIE briefing said.<\/p>\n
Chorus signed an MoU to be cable partner for the 6000km Tasman Ring project, which seemed a good opportunity for the UFB fibre operator to diversify beyond its highly regulated domestic business.<\/p>\n
But late last year, Chorus walked away from the Tasman Ring.<\/p>\n
Chief executive Mark Aue told Tech Insider at the time that anticipated demand had not eventuated.<\/p>\n
\u201cPre-sales commitment was not stacking up,\u201d the Chorus boss said.<\/p>\n
Another key factor: the limited number of cable-laying ships in the world were all busy and 2027 seemed too tight, Aue said.<\/p>\n
\u201cThe timelines kept moving to the right. Realistically, I\u2019d now say it\u2019s post-2030,\u201d Aue said.<\/p>\n
The Tasman Ring Network will allow Datagrid to export its AI processing capacity. Image \/ Datagrid<\/p>\n
Galasso says the cable project has now been shifted in-house.<\/p>\n
Chorus livery has now disappeared from the cable project\u2019s artwork, with it now being promoted as the Datagrid Tasman Ring.<\/p>\n
A factory without many jobs<\/p>\n
In its environmental consent application, Datagrid said its \u201cAI factory\u201d would support up to 5400 jobs during its construction phase and 72 fulltime jobs once operational.<\/p>\n
It estimated the broader economic benefits would add $36m to New Zealand\u2019s GDP per year.<\/p>\n
If Galasso does get the project over the line, he will be doing better than Amazon, which abandoned construction on a giant data centre at Westgate after initial earthworks<\/a> and Microsoft, which dallied too long after winning a time-limited, use-it-or-lose it OIO consent<\/a> for a second Auckland data centre on a site at Whenuapai.<\/p>\n Both have favoured co-locating with existing data centre providers.<\/p>\n Chris Keall is an Auckland-based member of the Herald\u2019s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.<\/p>\n","protected":false},"excerpt":{"rendered":"As of this week, the national grid operator, Transpower, says it\u2019s still in an investigative phase. That\u2019s no…\n","protected":false},"author":2,"featured_media":334874,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[28848,365,52364,8613,138,1550,16535,1568,3105,179526,6119,13741,8482,179528,4486,3025,111,139,69,57472,165799,15488,6100,1961,1529],"class_list":["post-504578","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-28848","tag-ai","tag-beginning","tag-billion","tag-business","tag-centre","tag-colossal","tag-construction","tag-data","tag-datagrids","tag-faces","tag-factory","tag-huge","tag-hurdles","tag-month","tag-most","tag-new-zealand","tag-newzealand","tag-nz","tag-optimistic","tag-scenarios","tag-southland","tag-still","tag-this","tag-three"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/504578","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=504578"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/504578\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/334874"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=504578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=504578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=504578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}