At a glance
In an exclusive Q&A, Rémi Galasso says American AI companies are moving fast into the region, and that Australia is their natural first target.
Galasso's Great Southern Route would run from the US west coast, south of Australia, to Singapore, India and the Middle East, with Sydney and Melbourne in the middle.
Datagrid has contracted a 2,300km cable from Invercargill to a Torquay landing in Victoria, targeted for service in 2029.
Galasso says power efficiency, water efficiency and green electricity increasingly decide where hyperscale AI capacity lands.
Mercury's US$30 million for 12.7% of Datagrid puts a renewable generator on a developer's share register, a structure Galasso says is common in the US.
Galasso puts Australia first on the American buyers' list
Datagrid founder and chief executive Rémi Galasso says the American AI companies shopping this region start with Australia. "The American AI companies are leading the race, on the chips and on the applications, and they're moving fast into our region," he says in written responses to Certified Strategic. "Australia is a natural first target and has a lot to offer, I'd never argue otherwise." His answers were first published in full as an exclusive Q&A on our sister publication Datacentres NZ.
Galasso has argued for years that New Zealand's distance is a commercial asset, and says the shift has come faster than most expected. "What used to be seen as New Zealand's disadvantage, our distance, our remoteness, is now clearly an advantage: stable, secure, over 85% renewable, naturally cooled and far away from conflict zones," he says. Datagrid is "not claiming to rival the mega-hubs on raw scale", and he pitches the country instead as "a trusted place to train and store the world's most valuable data".
Galasso says three fundamentals increasingly decide these deals: power efficiency, water efficiency and genuinely green electricity, with political stability and security behind them. New Zealand competes on a different scale, he says, and he puts Southland ahead of Australian sites on all three. "On PUE, WUE and carbon, Southland can outperform anything on offer across the Tasman. When those advantages sit next to political stability and security, the conversation gets very interesting." PUE compares a facility's total energy draw with the energy reaching its IT equipment, and WUE counts the litres of water used for every kilowatt-hour of IT energy. Datagrid makes that claim for a campus still in design, and Galasso says firm water numbers will follow within weeks.
Sharon AI, which is building AI capacity in Australia, signed the largest AI cloud contract yet disclosed in New Zealand, at US$1.32 billion. The operators and pipeline behind that market are set out in the New Zealand spotlight.
Tasman Ring phase one comes ashore at Torquay, service targeted 2029
Datagrid contracted phase one of the Tasman Ring Network on 31 July 2026: 2,300km from Invercargill to a landing at Torquay in Victoria, at least eight fibre pairs, at least 160Tbps of design capacity, and a service target of 2029. Phase one is the only leg under contract, with an option to build the rest of the ring later. Galasso put the latency cut between the South Island and Australia at up to 45%, and Datagrid head of connectivity Pierre Goiffon put it at a reduction of at least 19 milliseconds round trip.
Galasso puts the Tasman Ring inside a longer route, from the US west coast down through the Tasman Sea and on to Singapore, India and the Middle East. "For years the assumption was that this region sat at the dead end of the internet. That's changing," he says, pointing at the South China Sea, where he says permits to lay new cable are hard to get and repairs harder still. "We call it the Great Southern Route, and it puts Sydney and Melbourne squarely in the middle of it." He says the route might well be extended to Chile at some stage.
Datagrid says outside air alone cools the Southland site most of the year
Galasso says the cooling design at Makarewa, Datagrid's Southland campus site, is still being optimised around the chips its future tenant will choose, because "some generations need cooler data halls than others". He describes a best case in which the site runs a closed loop liquid system cooled by outside air alone, touching no water at all for most of the year.
Galasso says the facility is engineered from the ground up to target one of the lowest water consumption figures in Asia Pacific, and that Datagrid will publish firm volumes when the design is finalised in the coming weeks. Environment Southland's permit, issued on 11 March 2026, sets a maximum cooling take of 7 litres a second, 604,800 litres a day and about 220 million litres a year. That is a ceiling on what Datagrid may take, and the volume the campus uses is a separate number the company has still to set. The site holds a 360MW grid connection against a 280MW initial data centre design. AWS will cool its western Melbourne campus with recycled water, a Victorian first, so the same design question is live on the Australian side.
Mercury paid US$30 million for 12.7% of Datagrid
The purchase closed in July 2026, four months after the two signed a 140MW, 15 year power purchase option over half the campus's initial design, and Mercury chief executive Stewart Hamilton took a board seat with it. "This is a model that's increasingly common in the US, and we're the first to bring it to New Zealand," Galasso says.
Galasso says Datagrid stays free to buy power from other New Zealand generators alongside Mercury's stake, with information barriers in place to keep competition between them fair. Datagrid can and will continue to work with other gentailers, he says, using the New Zealand term for companies that both generate and retail electricity. "Whether others follow, we'll see, but it makes a lot of sense here."
Technician and engineer shortages hit New Zealand and Australia together
"I'm not worried about our construction sector's ability to build and deliver a facility of this scale on time: that capability is here," Galasso says. "The real challenge, and we share it with Australia, is the specialist skills an AI data centre needs, both technicians and engineers."
Galasso expects universities and research centres on both New Zealand islands to close the specialist skills gap, standing up state-of-the-art programmes for local students and drawing international talent. In Australia the pressure reaches construction as well as operations, with every state short of the trades that build data centres, and specialist hiring tracked in data centre jobs in Australia.
The Makarewa numbers, and where each comes from
Public reporting has carried several cost estimates for Makarewa, and capacity is often quoted against the grid connection when the data centre design is the smaller number. Each figure below carries its source and date.
Metric | Figure | Source |
|---|---|---|
Grid connection at Makarewa | 360MW | Galasso clarification, 24 July 2026 |
Initial data centre design | 280MW | Resource consent, March 2026 |
Final data centre load | Under optimisation around the future tenant's chips, due within weeks | Galasso, written responses to Certified Strategic, 3 August 2026 |
Design water use | Targeting one of the lowest figures in Asia Pacific, firm volumes due within weeks | Galasso, written responses to Certified Strategic, 3 August 2026 |
Water consent maximum | 7 litres a second, 604,800 litres a day, about 220 million litres a year | Environment Southland permit, 11 March 2026 |
Mercury equity | US$30 million for 12.7% | Mercury NZX release, July 2026 |
Mercury power purchase option | 140MW, 15 years, about 1.2TWh a year | Mercury and Datagrid announcement, March 2026 |
Tasman Ring phase one | 2,300km Invercargill to Melbourne, at least 160Tbps, service target 2029 | ASN and OMS Group contract, 31 July 2026 |
Reported build cost | Between about NZ$3.4 billion and NZ$5.1 billion depending on scope | Public reporting, unconfirmed by Datagrid |
Source: Datagrid and Mercury disclosures, the Environment Southland permit, the Tasman Ring contract announcement, and Galasso's written responses of 3 August 2026.
What to watch
Makarewa's final load figure. The campus is designed at 280MW against a 360MW grid connection, and Galasso says the number settles within weeks.
The Torquay landing. Phase one is contracted to come ashore in Victoria with a 2029 service target, a year after the 2028 campus opening target RNZ has reported.
Mercury's 12.7% stake. Galasso says Datagrid is the first in New Zealand to use a financing model common in the US. A second Australian or New Zealand generator taking equity in a developer it supplies would show the structure has carried.
New Zealand's investment rules. Prime Minister Christopher Luxon directed Economic Growth Minister Nicola Willis and his department on 27 July 2026 to develop data centre investment principles, covering new generation, grid stability and who pays for transmission upgrades. The New Zealand election is on 7 November 2026.