Australia stalls TikTok’s data center plan over regulatory concerns

TikTok’s plans to build large data centers in Australia have stalled due to a lack of approval from the Foreign Investment Review Board (FIRB) for over a year.

The company, owned by China-based ByteDance, has sought to establish a 100-megawatt facility in New South Wales or Victoria, but faces regulatory hurdles linked to its foreign ownership.

TikTok asked local operators to submit construction proposals earlier in 2025, despite not securing support from Australian Treasurer Jim Chalmers.

Foreign entities wanting to own more than 10% of a data center in Australia require FIRB approval.

Concerns about national security and control over critical infrastructure remain central to the government’s scrutiny.

TikTok has engaged lobbying firm Anacta Strategies to support its efforts.

The situation comes as Australia’s federal government prepares to announce new policies aimed at boosting investment in data centers, amid growing demand from AI and cloud services.

🔗 Source: Australian Financial Review

🧠 Food for thought

Implications, context, and why it matters.

The Foreign Investment Review Board’s (FIRB) unpredictable stance creates strategic risk for Chinese-backed data centre investments

Australia has no steady record on Chinese-owned builds. In 2016, FIRB reviewed a 49 percent sale of Global Switch to Elegant Jubilee led by Jiangsu Sha Steel Group, and the government required the Australian arm stay owned and run by Aldersgate Investments 1. Defence exited by June 2024 after earlier estimating the move could cost up to AU$200 million 1 2.
Defence’s departure proved that FIRB-conditioned structures can become politically untenable. Home Affairs, the Australian Securities and Investments Commission, and the Australian Communications and Media Authority left Global Switch sites by 2022 2.
TikTok has waited over a year despite filing construction plans. Data centres now sit under the foreign investment framework as a national security business, which requires ownership disclosure and permits government intervention 3.

Australian data centre operators can capture demand diverted from Chinese-owned projects through strategic positioning

NextDC has committed $2 billion to Melbourne expansion 4, while CDC Data Centres won Defence’s $92 million hosting deal 2. These firms can pitch Australian-owned choices to hyperscalers, the largest cloud providers such as Amazon, Microsoft, and Google.
Investment reached $2.8 billion in the September quarter 5. Capacity could grow from 1,350 MW to 3,100 MW by 2030 4. Operators that meet the 5-star National Australian Built Environment Rating System requirement, mandatory from July 2025 for federal workloads, gain an edge with government buyers and ESG-minded customers 6.
Investors should watch for the federal AI policy and new grid connection rules finalised in May 2025, which streamline renewable co-location 6. Quinbrook Infrastructure Partners’ $2.5 billion Supernode integrates data with energy at one site, easing sovereignty concerns as well as grid pressure 4.