Goodman Group scraps 1.2bn Sydney AI data centre after community backlash

Goodman Group has abruptly scrapped its controversial $1.2 billion "Project Mars" data centre in northern Sydney, marking a major victory for local residents and community activists who mobilised against the massive artificial intelligence facility (Daily Mail). The developer pulled its application on Monday, citing an evolving regulatory landscape and intense local resistance (Realestate). The three-storey facility had been planned for Lane Cove West, dangerously close to residential homes and a public school, sparking widespread debate over the rapid expansion of digital infrastructure across Australia.

The proposed 21,000sq m facility would have operated 24 hours a day with a 90-megawatt capacity, slated for a site sitting merely 20 metres from the nearest home and 160 metres from Lane Cove West Public School (Daily Mail). Critics previously labelled the infrastructure proposal grossly irresponsible due to its immense environmental footprint, which included an estimated daily consumption of 1.4 million litres of drinking water for cooling purposes (Daily Mail). Sydney Water had earlier indicated that existing infrastructure faced limitations in supporting such high volumes (Daily Mail).

Goodman’s head of planning, Guy Smith, explained in a formal letter to the NSW Planning Department that policy frameworks had shifted considerably since initial planning began (Realestate). During this time, the policy and regulatory environment for large-scale data centre development has evolved significantly, Mr Smith stated (Realestate). He noted that the company weighed these emerging federal and state guidelines alongside community feedback before reaching its final decision (Realestate).

Opposition to the development stretched beyond local residents into federal and local politics. Liberal frontbencher Sarah Henderson condemned the scheme during a Senate hearing, characterising it as wholly unreasonable and showing contempt for neighbours (Daily Mail). Concurrently, Greens politician Sarah Hanson-Young highlighted noise pollution issues at a separate Lane Cove facility, noting that industrial AI installations are already placing strain on local utilities (Realestate). Lane Cove Mayor Councillor Merri Southwood welcomed the withdrawal, stating that the project lacked social licence (Daily Mail). Lane Cove Responsible Planning spokesperson Sasha Titchkosky told media she was absolutely ecstatic over the outcome (Realestate).

Not every voice aligned with the protesters. The planning portal included an anonymous submission arguing that industrial zones are explicitly intended for heavy infrastructure, asking where else such facilities could reasonably be constructed (Realestate). Nevertheless, broader anxiety regarding resource depletion prompted governmental intervention. The NSW Government introduced a framework in August requiring artificial intelligence developers to fund additional supplies of water and energy (Daily Mail). Meanwhile, federal oversight continues to evolve, with national laws anticipated to take effect around early 2027 (Daily Mail).

Reports indicate that Australia held approximately 165 data centres, with hundreds more proposed across the country (Daily Mail). Local authorities have urged state regulators to pump the brakes on fast-tracked approvals until formal parliamentary inquiries deliver their final conclusions (Daily Mail).