NextDC Halts Uncontracted Projects Amid Melbourne Data Centre Setback

Australian data centre operator NextDC has announced a suspension of work on projects without customer contracts following significant delays and community opposition to its flagship M3 data centre expansion in Melbourne. The setback, driven by power supply delays and local backlash, forced the company to downgrade its earnings forecasts last month, triggering a 42% plunge in its share price. CEO Craig Scroggie said the company would now prioritise securing community support and fulfilling projects backed by firm customer commitments.

The company, previously regarded as one of Australia’s most ambitious data centre developers, had 11 facilities in development or planning, according to its 2026 annual report. Scroggie said work on suspended projects would resume only after NextDC addresses concerns, restores public confidence and demonstrates that it has earned the trust of the communities supporting its developments. He also highlighted growing global concerns surrounding artificial intelligence and data centres, which are increasingly facing scrutiny over their physical infrastructure and environmental impact.

Meanwhile, major rivals Goodman Group and US-based Digital Realty have acquired a 9.9% stake in NextDC for A$715 million ($492 million), following the company’s share price decline. Although the investors said they currently have no plans to launch a takeover bid, they expressed interest in collaborating with NextDC’s board and management to address its challenges. Their investment helped NextDC recover the share price losses triggered by its earnings downgrade, adding a new dimension to the company’s uncertain outlook.

Pic Courtesy: google/ images are subject to copyright