The next war is about compute — and Australia isn’t ready

Australia is making a critical mistake by relying on global cloud providers and expanding its data center footprint without a national infrastructure strategy, writes Paul Budde.

FOR MOST OF THE WAR in Ukraine the focus was on tanks, missiles and drones. But beneath the visible battlefield, a quieter transformation is taking place; This is a transformation that could ultimately be more decisive than any weapon system.

The war is turning into a contest over computing.

Behind every drone swarm, targeting system, and real-time battlefield decision lies an invisible layer of infrastructure: data centers, cloud platforms, communications networks, and energy systems. What Ukraine has demonstrated (often under extreme pressure) is that modern warfare is no longer just about firepower, but the speed at which data can be processed, decisions made and actions coordinated.

When these systems fail, everything starts to unravel.

As highlighted by Clara KaluderovichThe critical vulnerability is not the lack of computing power – the capacity of Western cloud providers is more than sufficient – but the ability to access this computer under attack. Even the most advanced systems quickly fail when disconnected. Autonomous platforms lose coordination. The data becomes unusable. Decision making slows down.

In other words, without resilient computing infrastructure, advanced military capability becomes little more than idle hardware.

This is not just Ukraine’s problem. This is a preview of a much broader shift in what constitutes strategic infrastructure in the 21st century.

For decades, governments have treated data centers as commercial real estate; important for economic development, but not fundamentally different from other private sector investments. The Ukraine war challenges this assumption. Computing is now as critical as energy, logistics or industrial capacity.

However, in Australia this shift has found little space in policy thought.

We continue to depend on global cloud providers, largely American, for the underlying infrastructure that supports our digital economy. While this provided efficiency and scale, it also created a structural dependency that was rarely acknowledged, let alone addressed. There is no serious discussion about what happens if access to these platforms is disrupted, restricted or politically constrained.

This is not theoretical. Australian Department of Defense already acquires US data analytics firm Palantir Technologies are transferred to their systems through a series of contracts. These platforms are at the heart of data integration and operational decision-making, the layer on which modern warfare is increasingly dependent.

Controversies surrounding such systems Everything from surveillance concerns to sovereignty issues reflects a deeper issue. When computing becomes strategic infrastructure, the risk lies not only in dependence on foreign platforms but also in how these platforms process data and shape decisions.

At the same time, Australia is expanding its data center footprint at an unprecedented rate, driven largely by AI and hyperscale cloud demand. However, this expansion is primarily considered as an economic opportunity such as attracting investment and creating employment, rather than being a part of the national infrastructure strategy.

This is a critical error.

Data centers are not just buildings full of servers. These are energy-intensive facilities that sit at the intersection of digital capability and physical infrastructure. A single large facility can consume as much electricity as a small city. As the adoption of artificial intelligence accelerates, these demands will increase exponentially.

This is creating a convergence that policymakers have not yet fully grasped: computing, energy, and national security are becoming inseparable.

Australia currently faces challenges in energy resilience, grid stability and long-term planning. Adding large-scale computing demand to this system without a coherent strategy risks further exacerbating these vulnerabilities. At the same time, the absence of distributed, flexible computing architectures, including edge and locally controlled systems, leaves us vulnerable to disruptions that can traverse both the digital and physical economies.

The lesson from Ukraine is not that every country should militarize its data centers. The lesson here is that flexibility needs to be built into the system from the very beginning.

This means rethinking how and where computing is located, how it is operated, and who ultimately controls it. This means moving beyond the centralized model of cloud dependency towards a more distributed architecture that can continue to operate when networks fail or are interrupted. This means accepting that energy policy and digital policy can no longer be developed separately.

Most importantly, a change in mentality is required.

For too long we have treated digital infrastructure as an abstraction, a layer on top of the “real” economy. Ukraine shows that this distinction is no longer valid. Computing is now embedded in the fundamental functioning of modern society, from defense and communications to finance, healthcare and critical services.

The uncomfortable truth is that Australia, like many other countries, still operates with a peacetime understanding of infrastructure in a world that is rapidly moving beyond.

As I mentioned earlier, societies tend to act only when a crisis forces them to do so. The danger is that by the time the importance of computing infrastructure is fully realized, the opportunity to proactively shape it may have already passed.

The next war may not start with a missile attack or a cyber attack. This could start with something much less visible: the silent disruption of the systems that turn data into decisions.

And if that happens, those who control resilient computing and the systems that shape those decisions will hold the decisive advantage.

Paul Budde IA is a columnist and managing director of independent telecommunications research and consultancy. Paul Budde Consulting. You can follow Paul on Twitter @PaulBudde.

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