Data Centres 101: What Do They Actually Do?

This week, Filip Tortevski and Pedro Banales break down how data centres work, why they are expanding across Australia, and whether community concerns about their impact are justified. They examine the companies building these facilities, the infrastructure required to support them, and the ASX stocks that could benefit from the billions being invested across technology, energy and construction.

• 0:01Speaker 00

  This podcast is brought to you by Wealth Within, a global leader in stock market education. For more information on our courses, head over to wealthwithin.com.au. Please note that the information in this podcast should not be considered personal financial advice. Enjoy.

• 0:20Speaker 01

  Welcome to the Talking Wealth podcast. You're on with Phil and Pedro. And today we are going to touch on data centers, as it's been a huge topic of discussion lately amongst everybody, basically. And we're going to be answering the question, or I mean, I would be saying mostly posing the question of whether we are building too many data centers. I mean, everybody's seen the headlines, more buildings are going up across Sydney, Melbourne, hundreds of megawatts of electricity, concerns about water, diesel generators, concerns about noise, everything. So we're going to dive deep. This is going to be a

• 1:02Speaker 01

  basically data centers 101 for you guys to be informed and, you know, to basically make your own mind up, because there's a lot of information going around. So in saying that, oh, welcome in Phil. How's it going?

• 1:18Speaker 02

  Good, mate. How are you going?

• 1:20Speaker 01

  Yeah, going good. Excited for this one. It's a it's a techie subject. So, you know, I'm already excited.

• 1:27Speaker 02

  Yeah, yeah. Look, it's it's pretty, pretty serious what what it may mean for a lot of things. I mean, for resources, for for the globe, for climate, for for everything. And then obviously for investing, you know, what happens to Australia? Do we abandon the whole? Because we've got so much vast land. Do we abandon the the immigration story and just start pumping it with data centers, you know, maybe that's far fetched, who knows? But yeah, but nevertheless, it's worth it's worth talking about everything because, yeah, they're coming,

• 2:08Speaker 02

  they're being built, and we don't really know when it's going to end.

• 2:13Speaker 01

  Yeah, that's right. I mean, everything's on the table, like you mentioned. And, you know, there was a news the other day of, I think it was Anthropic, they're building a huge data center in Queensland that some people aren't happy about. And I mean, we're going to touch on on that later anyway. But I mean, my view is that if we want nice things, we need to make some concessions. And, you know, AI is providing a lot of benefits. And I know a lot of people aren't happy with AI. They're talking about taking jobs and they're sick of AI and so on. But I think that we've been here before. We've been here

• 2:52Speaker 01

  before with the first industrial revolution, where workers were replaced with with machines, with steam. And of course, they weren't happy with it. They revolted, the many factories were burnt down because of that. But again, it was inevitable. And now it's it's it's got us where we are now. And we actually wouldn't be having this conversation over over teams, over technology, if that wouldn't have happened. And I'm sure that eventually, you know, when people are having nice things with AI, and our health improves, our standard of living is improving, maybe we can even help those countries that are, you know, that need help as well, using AI, I'm sure they will see the benefits. So but we do

• 3:36Speaker 01

  need to make some concessions and and build these data centers, or else it's not going to happen. So, so the governments are telling us that data centers are critical infrastructure, and Australia needs them to support artificial intelligence, cloud computing, banking, healthcare, and the digital economy. So who's right? So that's that's the question. So data centers don't just need computers, they need enormous amounts of electricity and backup power. So that's creating a second investment thing, which that's an interesting one that that we're going to touch on later, because it's not only about data centers, but what's going to power them. And we already know that, of course, power plants need to power them.

• 4:17Speaker 01

  But what happens when they need to be always on? Because data centers need in a 99.9% uptime. So what happens when that power fails? They're going to need backup power. So that's creating a secondary investment opportunity that you guys should definitely take note of. So by the end of this podcast, you will have a much better idea of whether data center boom is a genuine economic opportunity, an energy headache, or potentially both. So, yeah, let's dive in. Data centers 101, what actually happens inside? So at its simplest, a data center is a highly secure industrial building filled with servers. The service,

• 4:59Speaker 01

  store and process, cloud computing, AI, banking, streaming, so Netflix, things like that, government systems, websites, corporate software, and telecommunications. So, I mean, people rely on on all of that. And we are getting to the stage where we want things faster, we want them now, we want them yesterday. And if we don't build these these data centers, I mean, the services wouldn't wouldn't be available. So

• 5:28Speaker 02

  Yeah.

• 5:29Speaker 01

  Yeah, that I mean, that that in itself, that list, without going further, I mean, what are your thoughts so far about, you know, what what data centers, you know, are and and how important they are?

• 5:42Speaker 02

  Yeah. Look, I mean, I'm I'm hearing both sides of the equation. Like, I watched this really cool documentary yesterday about on Netflix about the AI apocalypse. And, you know, you've got people saying that they're going to do all like, all the bad things about it, it'll take over, it'll take jobs, it'll, you know, it'll suck all the energy out of the world. And then on the flip side, you've got the the optimists that say the things you said, you know, from all the advancements we're going to get in such a short space of time for challenges that we've had, or bottlenecks that we've had. It's going to to revolutionize

• 6:23Speaker 02

  areas like healthcare and really make our standard of living better. I see both sides of the equation. I just I'm just weary about, you know, how how big the shift may or may not be, and whether the shift gets overstated. Because right now, we're at a point where with AI, especially, there are the the big, the big players talking about slowing things down. And they're they're saying to slow things down because of, you know, the breaches that have happened to some degree. But I think it's much, much deeper than that. I

• 7:05Speaker 02

  think we've got to a point with AI where what it can do on the current, I guess, platform and on and on the current backings, whether that be, you know, the current data centers, the current energy sources, where it's kind of all there from what it can do, you know, and companies have been using it, they've been making money, they've been cutting costs, sometimes getting rid of labor. But it's out there. Now, I've had the personal experience of of getting the new version of my chat GPT, or my AI, and it giving me the option

• 7:44Speaker 02

  to use the most latest powered version where it is, you know, it the best thinking, no mistakes, and all that kind of stuff, or much less. Now, the problem is, it doesn't do anything different to what I asked the free version to do, apart from the fact that it may do it with less mistakes. But every time I what would last me the whole day, where I where I or last me infinitely, in terms of how much I could use it. Now, when

• 8:22Speaker 02

  I use this more powerful version, it literally asks, I can ask one question, and I'm out of credits.

• 8:33Speaker 01

  Yeah, you need more tokens.

• 8:35Speaker 02

  And it thinks for an hour, and it thinks for an hour before, or and I'm maybe exaggerating, but it thinks for a very long time before it gets the answer. Now, in simple terms, what that means, we've got to a point right now, where if you want this to operate on a somewhat better level, it's going to cost you out of the ass, like ridiculously more. Who can run a business using AI, especially if they're transformed to AI, when now they're if and if they're having the issues of, you know, not not being accurate, or forgetting things, or hallucinating, which it all does, and now AI is offering a better solution. But that solution means that you were able to in the past get through 50, 60, 70 questions

• 9:19Speaker 02

  or jobs. Now, one, you can only do one job, and you have to pay a lot of money just to get the thing up and running again. So we've come to a point where where this is becoming far more expensive to use at the at the level people probably want, if to go full replacement.

• 9:41Speaker 02

  And and it's requiring a lot more energy. So have we come to a bottleneck with with AI? And all of these data centers that we're building, at what point does it stop? At what point have we breached the too far, too much, too soon? And at what point does the next technology, or maybe some new chip or quantum thing come in, where the structure for for being able to power this this tool that is AI changes? And what happens then?

• 10:21Speaker 02

  We've destroyed the earth, we've slapped all these boxes together. And we already know that these government that these AI companies have invested so much in capex spend. They shouldn't be slowing down if if it's why are they slowing down? If right now, I think we got to that point where it's like, all right, this is what it does. What else can you do now? Yeah, you've got AI agents and all that. But they're the things that require more power and it costs a hell of a lot more. So my view on data centers is is

• 10:56Speaker 02

  Oh, I don't know, um, I don't know whether this is sustainable, man, to be honest. What are you gonna, just gonna do, ke- keep filling the earth with data centers? I don't think it's sustainable. And I think that they're gonna find a new technology at some point that's gonna render all this obsolete. And then what, then, then how are we gonna, how are we gonna, um, recycle all this, or how are we gonna get rid of all this? Do we have a process for that? Do we have a system for that?

• 11:27Speaker 02

  I don't know.

• 11:27Speaker 01

  Hmm. Hmm, I think that's, that's fair points. Uh, my view on that is that, you know, possibly to get to those new technologies, we need the, the processing power to get there. So maybe these data centers are needed to get to that next level. And then once we do get to that next level, then they're obsolete. And then maybe they're repurposed for something else, like, like we saw with, um, offices during COVID now, those offices are now empty and now they're thinking of repurposing them for apartments. I don't know, maybe you might be living in a data center one day. Um, so we do have a housing crisis here in Australia, so.

• 12:04Speaker 02

  Look, man, they don't come with windows or they don't come with a- anything remote, uh, for a home. So I don't, yeah, look, maybe, um, maybe, but, but, but the, the, the, the fact that they're making more and more, I think the technology needs to, the technology is not advancing from what I'm seeing, uh, and, and maybe I'm naive or I'm not as, you know, deep in this stuff, but of, I, again, I go back to, all right, yeah, maybe my, my AI now can draw better pictures for me, which is, which is good, but it still makes mistakes. Um, I still need to be the mind that inputs what I, what I want, what I need. Yeah, there are, are AI agents that are helping do all these things, but, um,

• 12:50Speaker 02

  I haven't seen it, like, I can't just let it take my computer and go, all right, work for me for the day, um, unless I've programmed it to do cer- certain specific tasks. Um, what it does, what it does right now, it, it's not that much more advanced than how it started off. Um, what it started off doing, uh, yet we're gonna need more and more of these data centers because more and more people are gonna be using it. Um.

• 13:22Speaker 01

  Yeah.

• 13:23Speaker 02

  So, so that, that, that trade off between doing more for us and costing more for us is diminishing, in my opinion. And that's not, that's often what causes markets to, you know, correct.

• 13:37Speaker 01

  Hmm, hmm. Yeah, it's, um, it's, it's an interesting thought. I think that, you know, regardless, we're, we're having all of these, um, data centers being scheduled in. Um, also, it's, it's, um, interesting to note, uh, Elon Musk, I mean, you can't talk about this without mentioning him, he's building a, the, the terra fab. And now this is related to data center, it's not a data center itself, but he's basically, uh, invested like, uh, I think it's like a hundred and twenty billion dollars into this terra fab. It's like huge, it's a huge structure, uh, for making semiconductors, for making chips and, and, and graphics cards. Because he said, i- if, um, whatever output TSMC has, which is the, the one that creates the semiconductors and so on,

• 14:22Speaker 01

  and Nvidia and Samsung and whoever is making them, whatever capacity they need, but it's only like five percent of what the, he's going to need for Optimus, uh, robot, for the Tesla cars, for the, um, his SpaceX program. So all of that, he's like, you guys can't even output enough for what I need. Uh, so he's like, you know, stuff it, I'll, I'll make it myself. So now he's building this huge, uh, terra fab. Um, you know, largest building on earth, basically it's going to be. Um, so that gives an idea of the amount of, you know, data and processing that's needed for these huge projects, uh, that's coming.

• 15:01Speaker 02

  He also, he also said recently that we shouldn't worry about money.

• 15:06Speaker 01

  Yeah.

• 15:06Speaker 02

  That we don't, we don't need money, uh, coming from the guy that's got how much, um, and he, what he's saying does not, like, I, I saw him stumble on this interview when a lady asked him some really hard hitting questions last week, but just obvious questions, um, and he didn't have the right answer for it. He was just mumbling through and I'm going,

• 15:31Speaker 02

  is this the, like, if we're putting all our faith in you, like, you're talking about making these mega changes that are gonna affect the earth drastically. Um, and you can't give us an exact answer of, of, of why you're saying what you're saying and, and how it's gonna implement humanity. Um, he's so far out of touch, I think, that.

• 15:57Speaker 02

  Yeah, anyway, I know it's not about, uh, talking about him, but I, I, I've, I used to look at him as, as an interesting character that could, that could do some good, but what's the good?

• 16:10Speaker 02

  Put all your au- autonomous shit taxes in there and your robots so that you can make more money? Like, what, what, what could a robot do for me? That's gonna require that, how he says, you're not gonna need more money. You'll have everything you possibly want through a robot. What, what's the robot gonna do? Build me a Ferrari? Uh, is the robot going to fly me to somewhere, um, for free? On a holiday? Is it gonna make my cocktails? You, like, what is the robot gonna do apart from wash dishes and, and, and, um, clean, the clean clothes and maybe drive you here or there?

• 16:51Speaker 01

  Hmm.

• 16:51Speaker 02

  It's still gonna require power. I'm not getting the power from the, from the, uh, ether, like Nikola Tesla. Who's gonna pay for the power to power the robot or the subscription to get it? What, his, uh, taxes are gonna be free? No? Yeah? And, and his shareholders are gonna be happy about that?

• 17:08Speaker 01

  Well, he's talking about universal basic income. So basically the government will be giving income, uh, to you, but I mean, I don't agree with that either because where is that income going to come from? Yeah, and, and who decides what to get? Where's that income coming from? I mean, so there needs to be commerce. There needs to be a sale of something and a purchase of something for you to be able to generate that income. So if nobody's working in the world and it's just robots, who's gonna be doing the commerce? Who's gonna be doing the buying and selling?

• 17:37Speaker 02

  Uh, well, who's gonna be doing, what about healthcare? Or like a lot of our, our fundamental basics that we have, uh, why Australia's so, you know, such a rich country. Um, we have free Medicare, we have, you know, schooling, we have all of this stuff. That's funded by taxpayers, that's funded by people doing things and building things and innovation. And where does creativity go then? What about all these people that want, you know, wanna do things that are creative, but no, your robots are gonna give me everything I want? Who the, who the, uh, you to tell me that your, you, your robots are gonna tell me what I want and what I need and what I like?

• 18:10Speaker 01

  Yeah, yeah.

• 18:12Speaker 02

  Yeah, I'm sorry, man. I just don't like it at all. I think it's, it, it, it's one man trying to impose his will on the world. Um, and this is how dictatorships happen. Don't worry about nothing, we'll all feed you socialism, we'll feed you a little bit of money. Everyone's equal and I'll take care of things with my robots. Yeah, sure, mate. Sure.

• 18:35Speaker 01

  I'm actually pretty excited about the robots.

• 18:37Speaker 02

  That's, that's.

• 18:40Speaker 01

  I, I, I have a different view. I actually think that, I mean, imagine healthcare, like you mentioned, with robots taking care of, of people when you're elderly. But I think that there's a, a bit of a, a plan that he has around.

• 18:53Speaker 02

  Where's the empathy? Where's the empathy? You know what's nice to take care of? Somebody in a nursing home doesn't just need their ass wiped, they, they probably need someone to listen to them in a, a human hand to go, yeah, you know what? I listened to that story, make them feel human or make them feel okay. Just wiping someone's ass or feeding them food. Yeah, wha- wha- what, what are, what are you doing as, as a robot? And surgeons, okay, they may have a steadier hand than surgeons. Yeah, maybe it may help there, but we're using robotic arms now anyway in surgery. So it's not like they're gonna offer anything new. Um, and, and what if they malfunction? On an elderly person and grab them too hard and, and break their leg or, or, or something like, these are not humans.

• 19:38Speaker 01

  For sure. I mean, and that's probably.

• 19:39Speaker 02

  Human experience is, the hu- the human experience is more than just someone doing something for you or cleaning or wiping or, some people have enjoyment in mowing their lawns and, and, and doing all that stuff. It's like, I don't know whether it's gonna solve what he thinks it's gonna solve. Um, and. It's being pushed. It's being pushed through these uh by building Skynet with these data centers. You can see how I feel about all this today.

• 20:07Speaker 01

  Yeah, yeah, well, we'll see what happens with that. Let's um, let's move on because you mentioned electricity. You mentioned power before, and I think that this is important to know because this is what a lot of people were concerned about in how much electricity are these data centers going to use? So we measure electricity megawatts, M W. So um, you know, rough illustration is one megawatt operating continuously is eight point seven six gigawatt per year. So megawatts turn into gigawatts. So ten megawatts is eighty seven point six gigawatts, a hundred megawatts is a hundred, eight hundred and seventy six gigawatts and so on. You know, you know, you just move up from there.

• 20:49Speaker 01

  So uh, the uh, A E M O says Australia currently has around a hundred and sixty two operational data centers. So we've already got them. We've already got a lot of them uh before people started to, you know, up in arms about a new ones coming up. Um, so that accounts roughly to two percent of the grid supplied at electricity. So again, a hundred and sixty two operational data centers only using two percent of the grid supplied electricity. Uh, under its step change scenario, data center consumption in the N E M rises from around five terawatts in two thousand and twenty six to about thirty four terawatts by the thirty six.

• 21:33Speaker 01

  So in ten years, by two thousand and thirty six, we're going to go from five terawatts, which is the the combined usage of of data centers, from five terawatts to thirty four terawatts. So I mean, that's, that's what, like six times more usage than what we're doing now. So uh, that's uh, that is pretty big. That's a pretty big step up. So we're going to have to do something about the power grid because I don't think little twirling windy things and uh, you know, just whatever we're using now to generate power or wanting to generate. I don't think that that's going to be enough for this. And we saw already America and China and all of the the the powers that be going into nuclear and and and some, you know,

• 22:18Speaker 01

  powerful sources of electricity to to to do that. So um, but you know, regardless, going back to the concern, uh, you know, right now, two percent of of supplied electricity. So um, I would be more uh concerned about how the government is funding uh, our our uh, supply of energy rather than the demand of energy that data centers are using. So I would actually take that out of the conversation. Uh, don't worry about how much data centers are using because that's negligible. Let's worry about how much or how we can increase the supply of electricity. So then we've got enough um for to lower our electricity bills as well. So don't blame the the data centers for your electricity bill.

• 23:03Speaker 01

  Um, you know, blame blame what what we're doing uh in terms of electricity generation. That that that would be my uh take on that. And then that leads on to the second uh issue with which is water. You know, a lot of people are talking about water. Uh, in a lot of communities are concerned about this uh because data centers need cooling. So traditional cooling can use water while newer systems such as closed loop liquid cooling can significantly reduce water consumption. So closed loop is basically the water just stays within tubes and and and it just gets reused. So in two thousand and twenty five, Australian data centers use an estimated five point five gigaliters of water for cooling.

• 23:46Speaker 01

  Now that sounds enormous, but nationally that was about zero point zero four percent of Australia's total industrial water use. So seven point zero four percent. So the problem uh is where the the the the water has been used. So the data center in a water abundant location is very different from putting several giant facilities into a water stressed stressed catchment. So that's that's the the issue here, not how much water they use is don't put them in a place where it lacks water. But you know, better to put them where where it's abundant. And and actually, I I was researching this the other day on um, there's there's a place here in Victoria called uh, the Gibbsland, right?

• 24:31Speaker 01

  So you've got Moore, Taralgan and and and Moe and all of those places. Now, they they've um, they've earmarked that place for um, uh, data centers, right? They're they're building some data centers there. Now they've got some coal plants there that have been decommissioned. And what happens when you decommission a coal plant is that you get this huge mining, you know, hole where the coal has been mined and they have to fill that up with water. So they're they're talking about using that water and and and those existing infrastructure to cool the data centers. So I think that that's a um, you know, a good example of of putting the data centers somewhere where at least

• 25:10Speaker 01

  the infrastructure is there and it's close to the power grids because that's, Gibson is naturally a a power generating um, a a region. Uh, so it's got the the power, it's got the water, it's got everything that's needed. Now, for example, putting data centers, where is it in in in Footscray, I I believe, or?

• 25:27Speaker 02

  Yeah, yeah.

• 25:28Speaker 01

  I think that maybe that's not the best option. Uh, but I think that they're trying to prevent kind of that lag for for communication. They want to put it in in in the city catchment somewhere uh for the communication purposes. But I I I would agree that residents, you know, wouldn't be very happy. And I wouldn't be very happy to have it right there in a condensed, in a, in a, you know, that environment where it's so dense.

• 25:55Speaker 02

  Um, well, it it emits, it emits energy, um, you know, people complain about five G towers. I mean, imagine living next to a data center.

• 26:04Speaker 01

  Hmm.

• 26:04Speaker 02

  Uh, but what's interesting is the, you know, the water consumption, zero point zero four. Um, which is, yeah, that that that number is is not that big when you think about it. So it's half a percent.

• 26:25Speaker 02

  Now, let's say, what's the the data center likely to grow? Let's say it grows tenfold, right? In the next five years, the amount of data centers, uh, is that safe to say?

• 26:43Speaker 01

  Uh, yeah, well, according to what we were talking about before, according to the power generation, it's going to be about roughly about a sevenfold increase, you know, we said six to sevenfold.

• 26:54Speaker 02

  So let's call it sevenfold, half a percent times seven, it's about three point five percent of of total water. Um, which then you've got to decide, is that a lot, you know?

• 27:08Speaker 01

  Hmm, well, actually, zero point zero four times seven, it'll be only about zero point two eight percent.

• 27:16Speaker 02

  Oh, sorry, it's zero point zero four, I thought it was zero point four.

• 27:19Speaker 01

  Yeah.

• 27:20Speaker 02

  Yes, so not even a percent, yeah, okay, well, that's interesting.

• 27:24Speaker 01

  Hmm.

• 27:24Speaker 02

  That that I saw, I thought that data was like um alleviates a lot of the concerns around the water for people because yeah, you know, that that's one of the big things talked about, that these things are going to chew up a lot of water and that's going to cause the water coming out of the oceans and then that's going to cause um, you know, the the tsunamis and and all that kind of stuff, so.

• 27:47Speaker 01

  Yeah, big apocalyptic kind of scenario that that people think about.

• 27:53Speaker 02

  Um, yeah.

• 27:54Speaker 01

  So let's let's let's touch on a few other concerns quickly because I I wanted to get to this last kind of uh opportunity that that, you know, people may want to look into. So what about fumes? You know, there's also concern about fumes. So the main concern comes from uh backup generators. You know, large data centers need extremely reliable power. If the grid fails, diesel generators can start almost immediately to help uh keep the facility operating. So it means that a large facility can have hundreds of generators, exhaust stacks, regular testing, large diesel storage, emergency operation during grid outages. So um, the air quality assessment allows uh around large pro projects look at pollutants like nitrogen oxides,

• 28:38Speaker 01

  particulate matter diesel exhaust. Now, the impact depends heavily on the number of the size of the generators, operating hours, emission controls, prevailing conditions and distance from sensitive receptors. New South Wales planning material for data center projects specifically considers generator testing, emergency operation and nighttime noise noise and air quality impacts. So data centers are being built partly to support the digital economy and A I, but because they cannot afford to lose power, they can also require substantial amount of diesel backup infrastructure. That's not something that you want to have in in in your backyard.

• 29:18Speaker 02

  No, not at all.

• 29:21Speaker 01

  Um, and and then we've got the noise. So the what could actually be uh, you know, more relevant is uh, the the the the noise because obviously you don't want to live around noisy data centers. So um, the data center isn't necessarily loud because of the computers. The noise comes from cooling fans, chillers, pumps, transformers, ventilations and and generators. So unlike normal industrial facility that might operate intermittently, data centers operate twenty four seven. So you're going to have this twenty four seven buzzing or or whatever the noise is cooling. Um, there, uh, so even if the noise is within regulatory limits, residents can notice a completely different background sound environment.

• 30:05Speaker 01

  So forget about the chirping birds and the and and the the kookaburras here in Australia and and the magpies uh doing their their famous sounds, uh, you're just going to hear the buzzing from from the data centers. So the New South Wales planning process for for Project Mars, for example, specifically called for the assessment of generator testing, emergency operation, mechanical plant startup shutdown, nighttime impacts, low frequency noise and tonal noise. So that gives us an idea of what regulators are actually looking at. So it looks like it's in the process of being regulated, being looked at, but it is a concern. So so far, it seems like the the the noise and the and the fumes are the two valid concerns that people should have uh about the data centers being in the backyard.

• 30:51Speaker 02

  Yeah, I mean, obviously, the next one you're going to get into is the radiation. And that's probably the one that people are most concerned about if that is the case. Because, you know, living under power lines, people are concerned about that, about the EMF levels and all that. So, um, but then, you know, you, you, there are studies with like all these people. Some people I know would say, oh, I don't want to go next to a five G tower, yet they'll sleep with their phone next to their head.

• 31:20Speaker 01

  Yeah, exactly. And have wireless e-buds all the time.

• 31:25Speaker 02

  Yeah, yeah, yeah, it's pretty crazy.

• 31:29Speaker 01

  It, it, it is, it is. I think we need to, you know, take it with a, with a grain of salt. But it's interesting that you, you mentioned radiation because data centers don't produce ionizing radiation like X-rays or nuclear radiation. They do contain large amounts of electrical infrastructure, which generates electromagnetic fields, which is what you were saying, the, the, the EMF. So A P R, an A R P A N S A, which is, seems to be a, um, uh, some body. It classifies these as extremely low frequency, non-ionizing electromagnetic fields. So it says that there's no established scientific evidence that exposure to electric or magnetic fields around homes,

• 32:08Speaker 01

  offices or power infrastructures causes health effects, while nothing that some epidemiological research has investigated possible association, that's a tough one, with childhood leukemia at higher than normal prolonged exposure levels. So, um, the, the data centers are not radioactive. The more relevant questions are what electrical infrastructure is on the site? What are the substantiations and transmission connections? What are the measures EMF levels and are they within applicable standards? And how close to public infrastructure are they? Still a, a bit of a concern in, in, in my eyes. I mean.

• 32:48Speaker 02

  Yeah, um, yeah, look, we don't know. That's the thing. We just don't know.

• 32:56Speaker 02

  And that's the, the, the reality is, um,

• 33:03Speaker 02

  you know, people wanting to buy a house, live out, especially ones that are going to be buying in new, like new areas where there's land. I mean, how much should be, how much should the government forewarn people and say, well, you know what, we're, we're planning a, a data center in this town or in this suburb? And for people living in established, like, I know it's going to be hard, but if you're already living in established, what are they going to do? Knock a house down and put a data center? Probably not the case, but still, um, you know, it's, it's one of those ones where people should have the choice because the last thing you want is you buy in a new, new area and you think, oh, um, great.

• 33:48Speaker 02

  You know, it's going to be all housing and then all of a sudden, something happens and then you're living around data centers, which.

• 33:55Speaker 01

  Hmm.

• 33:56Speaker 02

  Yeah. I don't know how they're going to get, how it's going to happen because they didn't really warn anybody about putting up five G towers in front of their houses.

• 34:03Speaker 01

  Yeah.

• 34:04Speaker 02

  And, and they've done that. So.

• 34:06Speaker 01

  And they don't consult either. I think that's what residents in, in Footscray were, were, you know, angry about. No, no consultation from, from the government.

• 34:17Speaker 02

  Well, they've got the right to be, to be upset about stuff like that. So, mate.

• 34:23Speaker 01

  Exactly. All right. So let's now finish up, um, you know, go, take, get to the last, last segment, which, um, you know, how big is the Australian boom? So Australia already has a hundred and sixty two operational data centers, according to A E M O. But the pipeline is much larger, so it much, much larger. A B C analysts found at least twenty seven approved but unbuilt facilities with a combined capacity of three point three eight gigawatts. And that's only projects that met its method, methodology. So the A B C analyst identifies development in developments involving Amazon Web Services, Microsoft, Airtrunk, C D C,

• 35:05Speaker 01

  Next D C, which is a listed stock, Goodman, which is also a listed stock, and Stockland, which is also a listed stock. So you might want to have a look at those three, uh, Next D C, Goodman and Stockland as well. Have a look at the chart, see what they're doing because they could be looking interesting.

• 35:23Speaker 02

  Stockland's, Stockland's an interesting one to me because it's, it's a stock that's been beaten up, um, a lot.

• 35:31Speaker 01

  Yeah.

• 35:32Speaker 02

  And, you know, when you get stocks that have been beaten up a lot and, and they're in these, you know, they're making a shift. Like we saw B H P with copper and, and C S L with some of the restructuring. Treasury wines also doing shifts and, and seeing some upside now.

• 35:49Speaker 02

  I, I, and I'll talk about all stocks that have been smashed apart from B H P. Yeah, you, you definitely see some good trading opportunities.

• 35:58Speaker 01

  Yeah.

• 35:58Speaker 02

  But what I find.

• 35:59Speaker 01

  Looking at the chart now. Looking nice.

• 36:01Speaker 02

  Yeah. Yeah, yeah, yeah. Um, what I find funny, and it's a bit of a side note, but you, you know, with the, the whole government thing in Australia, in Melbourne, uh, in Australia, my, uh, you know, uh, I'm not going to say who, but someone I know very well, um, you know, was, was working in, in, call it residential or in the private sector.

• 36:24Speaker 02

  And, you know, the government, this, that, taxes, blah, blah, blah, they, you know, they're crap and they're destroying businesses. Anyway, he got a job as a, as an electrician for data centers on a union site.

• 36:38Speaker 02

  And, uh, and was speaking the other day and I said, oh, you know, you're going to vote for the next election. And he looked at me and I said, you're going to vote Labour, aren't you? And, and, and he's like, wow, yeah, yeah, I think so. I was just saying, oh, that's the problem, buddy. Money, money, money, money.

• 36:58Speaker 01

  Yeah.

• 36:59Speaker 02

  Everyone looks after themselves and money. And all of a sudden, it's all forgiven and forgotten. Cause you're getting paid by the Labour Union.

• 37:06Speaker 01

  Of course. And, and another, another example of, of government spending right there, isn't it? You know, it's, um, um, in some way, without getting too political, we might have some, some listeners that, you know, share that view. But, you know, at the end of the day, uh, I think it, it, it's about what, what moves us forward as a whole. Um, not, not that individual manner, like you mentioned.

• 37:33Speaker 01

  I think S G P, you know, just quickly touching on it, solid support at four dollars. Possible rise to five dollars as well, trading within a range. Um, so I do agree that S G P is looking very interesting. But also there's, there's another stock that, that we're going to touch on. Um, because I'm just going to get to the final part now, which is, is some possible, um, opportunity. So, uh, recently, uh, and, and going back to, um, you know, E, Elon Musk. He purchased a, um, a generator company. So a company that, that provides leasing generators for, for data centers.

• 38:17Speaker 01

  Uh, now that this was a move that was quietly done in, in, in the background. And, um, and that's basically to, to make sure that all his data centers always have that supply of generators, backup generators to be able to, to supply them. Now, not all data centers, factories and, and, and all data center companies, sorry, are, are going to be able to, to buy generator companies. So I think generated companies are starting to look quite interesting. And, and a big one that, that we have here is, you know, um, uh, what was it? It's, we've got Caterpillar.

• 38:57Speaker 02

  A P R. Oh, yeah, Caterpillar.

• 38:59Speaker 01

  Yep. Um, Caterpillar is, is a big one. Um, we've got, um, is it Simmons Hire? I, I believe.

• 39:08Speaker 02

  Uh, you, you might be, yeah.

• 39:11Speaker 01

  Uh, it's, um, let's see, E, Equipment Hire Australia. I've got a bit of a, a mind blank at the moment, but we've got Oss hires. Uh, we've got all equipment hire, Kennet's hire, that's a one, Kennet's, but unfortunately they're not, they're not listed. But one that is listed is S G H. So S G H is, uh, you know, they, they, they do a range of things. It's, it's a multi kind of, um, uh, it's like a conglomerate. It's, it's like a holding company. They actually own about thirty percent of, of, um, of Beach Energy as well. But they have the official license for, for Caterpillar.

• 39:54Speaker 01

  Um, and they have the official license for, um, you know, to, for a lot of these, um, uh, kind of, um, you know, leasing, um, companies. They also own Boral, their own Coats Hire as well. So it's, it's a very diversified company. So if you're looking for that type of exposure to, um, to those kind of generators, uh, that, that will power the, the, the data centers. I think S G H is looking quite in, in, interesting from a technical standpoint and from a fundamental standpoint. Now, I'll, you know, turn it over to you. I'm sure you've got the chart open. Um, you know, what, what do you think?

• 40:37Speaker 02

  Yeah, look, mate, this one, definitely a growth story. Since 2010, it's spent a lot of time from 2010 to 2016 going nowhere. But it's broken out since, so really nice growth. I'm just, I think if it can, thirty four dollars, it brings it back down to that long term, you know, rate of rise, which is pretty interesting. Anything under that, you're probably getting something at a discount, under thirty four. But also with that said, you know, the way it's kind of unfolding right now is still a bit bearish to me. So I'd be waiting to, I wouldn't be looking at just picking this up, even if it goes down to thirty two, thirty three,

• 41:20Speaker 02

  just because it's there, because it's had a really big run during twenty two to twenty twenty five. And, and I think we need to, this is one where you just blindly buying the pullback after such a strong run may not be the smartest thing to do, because if this is a major top and the end of the expansion, which there may be a pattern or two that, that kind of might give it away.

• 41:50Speaker 01

  Yep.

• 41:51Speaker 02

  Then, then this, this is probably one that could go for a deeper dive back into the eighteen. So, yeah, not bad. I mean, good, good, good volatility, good growth. It's pulling back now, probably something there, for sure.

• 42:03Speaker 01

  Yeah, yeah. And I think it's a good, because I know exactly that pattern that you're talking about. That's, that's my main concern. And I'm sure if students are listening, you know, if you've done module five, you, you understand that, that, you know, bearish kind of pattern that, that actually has been confirmed now. So that's the, that's a concerning part for me as well. And it's a good example of not blindly buying the story, because, you know, if you didn't know chart analysis, you could just say, oh, you know, these companies are going to be coming favor. These, these companies are, you know, they're going to be needed in the future. Well, that's true. You may be right in your theses, but is it the right time to buy them right now? Is the money flowing into it?

• 42:47Speaker 01

  And that's something that you can only achieve by looking at the chart, like we always say.

• 42:52Speaker 02

  Yeah, yeah, hundred percent. I mean, all the poor lithium people that were, you know, big lithium bulls for like the last ten years before it actually just took off. So, yeah, I've seen that story all too well.

• 43:06Speaker 01

  That's been hammered, hasn't it? And, and in the meantime, EVs are exploding. There's, you know, lithium is still in play, but the price has been smashed down. So that people would be trying to put that together and say, well, that doesn't make sense. Well, you know what? The market often doesn't make sense. But the chart is objective and you can just make what, what you can from what is happening with the price action. So, yeah, I think that's, we provided a bit of insight there. You've got some stocks to look at, you know, in this space.

• 43:47Speaker 01

  Make your own decisions, be informed about data centers as well. And, yeah, hopefully that, that informs you guys a little bit and helps with your, your investing decisions. So, thanks for your insights, Phil.

• 44:02Speaker 02

  No worries. Thank you.

• 44:04Speaker 01

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• 44:15Speaker 00

  This podcast is brought to you by Wealth Within, a global leader in stock market education. For more information on our courses, head over to wealthwithin.com.au. Please note that the information in this podcast should not be considered personal financial advice.