Alphabet (GOOGL) (GOOG) is planning to build a new AI data center on Australia’s Christmas Island, according to a Reuters report. The project follows a cloud deal that Google signed with Australia’s Department of Defence earlier this year.
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The island sits about 220 miles south of Indonesia and is known for its mining sites and red crab migration. Until now, it has had limited internet access and few job options. Local officials said Google is in talks to lease land near the island’s airport and may work with a nearby mining company to secure power for the site.
In the meantime, GOOGL shares rose 2.44% on Wednesday to close at $284.31.
Strategic and Economic Impact
Although the project’s cost and scale remain confidential, military analysts told Reuters that the facility could serve both commercial and defence needs. Christmas Island’s location gives it a key spot between Asia, Africa, and Australia, which makes it useful for monitoring regional activity in the Indian Ocean.
In addition, Google has applied for approval to install a subsea cable linking the island to Darwin in northern Australia. That line will be built by U.S. contractor SubCom and would improve communication speeds and reliability.
Local leaders have stated that the project could bring jobs and upgrades to the internet service. However, they also plan to review the social impact before giving final approval. For now, community reaction appears mixed, as some residents hope for new business while others worry about the island’s growing defence role.
Broader Cloud Expansion
The plan adds to Google’s growing list of cloud deals with Western governments. In July, Australia’s Defence Department entered a three-year cloud agreement with the company. Britain’s military also signed a separate Google Cloud deal this year to improve data sharing with the U.S.
If the project goes ahead, the Christmas Island site would strengthen Google’s position in the Asia-Pacific region. It would also support Australia’s digital and defence goals, while giving the island a rare chance at economic renewal.
Is Google Stock a Buy?
Google still holds the backing of the Street’s analysts, with a Strong Buy consensus rating. The average GOOGL stock price target stands at $309.76, implying an 8.95% upside from the current price.
