Is Australia’s internet ready for the AI boom? Inside the
Is Australia’s internet ready for the AI boom? Inside the record-breaking cable project

BRISBANE, Australia — The race to turn Australia into a global "AI factory" has officially moved from the data center to the deep sea.

SUBCO, the Australian-based submarine cable developer, announced this month the launch of APX East, a record-breaking "hypercable" designed to solve the looming bandwidth bottleneck threatening the nation's artificial intelligence ambitions. Spanning approximately 13,000 kilometers (8,075 miles), the project will create the world's longest continuous optical subsea path, linking Sydney directly to San Diego, California, without a single intermediate stop.

The project arrives as industry experts warn that Australia's current digital infrastructure is ill-equipped for the "token-heavy" demands of generative AI.

"Hyperscalers and neoclouds are looking to deploy 3 gigawatts of AI factories in Australia between now and 2028," said Bevan Slattery, Founder and Co-CEO of SUBCO. "This is going to need between 75 and 150 terabits of international capacity to deliver those tokens to the world. Any future system with a 2029 or 2030 service date simply won't work."

THE AI INFRASTRUCTURE SQUEEZE

For years, Australia's internet has relied on a handful of trans-pacific cables that often "hop" through intermediate hubs like Hawaii, Fiji, or Guam. While sufficient for Netflix streaming and corporate emails, these legacy systems face two major hurdles in the AI era: latency and capacity.

AI "inference"—the process where a model like ChatGPT generates a response—requires massive amounts of data to travel back and forth between global compute hubs instantly. As Australia prepares for a $26 billion investment supercycle in data centers, the "pipes" connecting those centers to the rest of the world have become the strategic weak link.

Current forecasts suggest Australia's data center capacity will nearly triple by 2030. However, the Australian Industry Group recently warned federal energy ministers that the power grid is already struggling to keep pace. SUBCO's gamble is that even if the power is secured, the data will have nowhere to go without a sovereign-owned express route.

A "SOVEREIGN" HIGHWAY

APX East is being marketed as Australia's first sovereign-owned international hypercable. Unlike many existing systems owned by U.S. tech giants like Google or Meta, APX East is designed to reduce Australia's reliance on foreign-controlled infrastructure.

"As data continues to become a core strategic national asset, a sovereign-owned cable offers Australia greater control over how its critical information is transmitted and governed," noted a recent report from GlobalData.

The technical specifications of the cable are unprecedented. It will utilize a 16-fiber-pair design and, crucially, will not require optical regeneration (boosters that require mid-ocean landing points) on the main path. It is also designed to be powered from a single end in the event of a fault—a critical resiliency feature given the rising geopolitical tensions surrounding subsea infrastructure in the Indo-Pacific.

DIVERSIFYING THE LANDING

To protect against physical threats or natural disasters, APX East will land at a new location north of Sydney's traditional "Southern Cable Protection Zone."

For decades, the majority of Australia's international cables have been clustered in a narrow corridor in Sydney's south. Experts have long called this a "geographic single point of failure." By landing further north, APX East provides much-needed route diversity, ensuring that a single localized event—such as an undersea landslide or an anchor drag—cannot isolate the nation's digital economy.

THE TIMELINE

The budgetary cost for the project is estimated at $500 million (AU$747 million). SUBCO expects the main trunk between Sydney and California to be "Ready for Service" (RFS) by the fourth quarter of 2028. Optional branches to Hawaii and Fiji are slated for 2029, though the company emphasized these will not delay the primary AI-focused route.

The 2028 deadline is aggressive but necessary. A January 2026 study from the University of Queensland highlighted that 57% of Australians are already embracing AI for daily tasks, from grocery planning to career management. As these "agentic" AI systems—models that can reason and take actions across different apps—become mainstream, the demand for real-time, high-speed connectivity will only accelerate.

IS IT ENOUGH?

While APX East addresses the connectivity problem, the broader question of "readiness" remains tied to the Australian shore.

"Australia is a prime place for big tech companies to spend money—we have land, stability, and renewable potential," wrote tech analyst Jaqui Lane in a recent industry brief. "But the power grid is not ready for the current estimates of data center growth. We are looking at a potential supply gap of up to 1.7 gigawatts by 2028."

If Australia can solve its energy dilemma, APX East will provide the high-speed gateway necessary to export Australian-processed AI "tokens" to the global market. Without it, the nation's multi-billion dollar data centers risk becoming high-tech warehouses with no way to ship their product.

As the window narrows for Australia to secure its place in the global AI hierarchy, the construction of APX East represents more than just a faster internet connection. It is an attempt to build the sovereign arteries of a 21st-century economy.