Microsoft alliance opens door to private spending on national security

Mr MacGibbon said Microsoft’s vast network had the power to block threats across the internet, and its cyber intelligence unit was equipped to identify nation states or criminals “behind the most egregious acts online”.

It was also good business for Microsoft to put its weight behind protecting democracies, as geopolitical tensions escalate.

“There is an alignment between the economic interests of Microsoft and the resilience of our nation,” he said.

“It’s time for them to invest their money to help protect the democracy and the markets they have made their billions of dollars from.”

Country managers of global tech companies often jostle for attention and funding from global headquarters, so the announcement represented a win for Microsoft Australia and New Zealand managing director Steven Worrall.

He told The Australian Financial Review that the close partnership with the Australian government had helped him secure the $5 billion data centre and training investment.

“We’ve worked very hard to attract the investment from headquarters …without the collaboration with the Australian government, I don’t know if the announcement today would have been possible,” Mr Worrall said.

Microsoft announced it would make its largest investment in its 40-year history in Australia to build nine new data centres and increase its computing capacity by 250 per cent over two years to meet the growing demand for artificial intelligence services.

In April, Microsoft’s big cloud computing rival Amazon Web Services announced it would invest $13.2 billion for Australian data centres to fuel its cloud computing business over the next five years, creating 11,000 jobs in construction, facility maintenance, engineering and telecommunications.

E&P Capital analyst Paul Mason said Microsoft and AWS had similar annual budgets and were competing intensely with each other to try to win more share of the cloud computing market.

“Microsoft is trying to become the No. 1 cloud player globally, and Australia’s one of the largest cloud computing markets per capita in the world,” Mr Mason said.

Microsoft has also committed to establishing a data centre academy in western Sydney to train 200 people in two years at TAFE’s Meadowbank campus and create an extra 300,000 places in its AI and cloud skills program.

“Microsoft’s investment will help deliver and develop the digital tradies that are needed now and well into the future in Australia,” Industry Minister Ed Husic said on a visit to the campus on Tuesday.