An American consulting firm is pitching New Zealand on a supposed $70 billion data centre opportunity fueled by AI hype, despite the inconvenient fact that no profitable AI data centres exist anywhere on the planet.
The report, released last week and discussed extensively on New Zealand's Reddit communities, represents the latest attempt by Silicon Valley-adjacent consultants to sell environmentally destructive, economically dubious infrastructure to a small Pacific nation that can barely afford the power price spikes these facilities would cause.
Mate, this is tech colonialism dressed up in PowerPoint slides. American consultants waltz into Wellington, wave around big numbers, and hope no one asks the obvious questions.
The pitch rests on the premise that AI-driven demand for computing power will create a gold rush for data centres, and New Zealand should position itself to capture a chunk of that market. Never mind that the AI boom has yet to produce a single profitable data centre operation globally, or that these facilities consume staggering amounts of electricity and water.
For New Zealand, a country of just five million people with already-strained electricity infrastructure, the proposal raises more red flags than opportunities. Power prices have been climbing for years, and adding massive data centres to the grid would either require billions in new generation capacity or force existing users — homes and businesses — to pay substantially more.
Then there's the environmental impact. Data centres require enormous amounts of electricity for both computing and cooling, and they consume vast quantities of water. For a country that markets itself on clean, green credentials, importing one of the tech industry's most resource-intensive operations seems counterproductive.
Kiwi Redditors weren't buying it. Comments on the thread ranged from skeptical to scathing, with users pointing out that New Zealand lacks the population base, the cheap electricity, or the geographic advantages that might make such investments worthwhile. Several noted that the country's distance from major markets and undersea cable capacity make it a poor location for latency-sensitive AI operations.
The consulting firm's report appears to rely heavily on optimistic projections about AI growth, conveniently overlooking the fact that much of the current AI boom is built on speculation rather than sustainable business models. Major tech companies are hemorrhaging money on AI operations, hoping future breakthroughs will justify today's massive infrastructure investments.
For New Zealand, this isn't the first time foreign consultants have arrived with grand plans. The country has weathered decades of dubious economic advice, from agricultural intensification schemes to financial deregulation. Sometimes the advice worked; often it didn't.
The $70 billion figure itself deserves scrutiny. That's roughly 20 percent of New Zealand's entire GDP — a staggering sum for an industry with no proven profitability. The report likely assumes massive foreign investment, but even attracting a fraction of that amount would require extraordinary tax breaks, infrastructure subsidies, and regulatory concessions.
Energy experts interviewed by New Zealand media have been more cautious. Several pointed out that the country's renewable electricity advantage could theoretically attract data centres seeking to burnish their environmental credentials, but the sheer scale of power demand would likely overwhelm existing generation capacity.
Politically, the pitch arrives at a moment when New Zealand's government is desperate for economic growth stories. After years of sluggish performance, ministers are eager to identify new industries that could drive employment and investment. That makes them potentially vulnerable to slick presentations promising tens of billions in economic activity.
But New Zealand has a strong tradition of skeptical analysis, particularly in its bureaucracy and academic institutions. Expect Treasury, the Ministry of Business, Innovation and Employment, and university economists to subject any serious proposal to rigorous scrutiny before taxpayer money or regulatory favors start flowing.
The real question is whether New Zealand will fall for Silicon Valley's latest sales pitch, or whether common sense will prevail. Based on the public reaction so far, Kiwis aren't impressed by big numbers and AI buzzwords. They want to see actual business cases, realistic power demand projections, and honest assessments of environmental impact.
American consultants might find New Zealand a tougher sell than they anticipated.
