Australian data center operator NextDC has paused projects without customer contracts after major delays at its Melbourne facility. The company announced the decision on November 9, 2026, to focus resources on committed projects. Power supply problems and growing community opposition have disrupted its M3 expansion, forcing changes to its development plans.
NextDC CEO Craig Scroggie said the company would prioritize projects with confirmed customer commitments. The decision also aims to rebuild local support for the Melbourne facility. NextDC has not revealed how many projects will face delays, although its 2026 annual report listed 11 centers under development or planning.
The main problem involves NextDC's M3 expansion in Melbourne, which needs additional electricity to support its operations. Power delays and complaints from nearby residents have halted construction. The company also faces pressure to find a solution and regain public confidence.
The setback prompted NextDC to lower its earnings forecast in October. Its shares dropped around 42% after the company announced the delay. The latest decision adds pressure as the company tries to protect its business plans.
Craig Scroggie explained that community support now matters more than expanding without confirmed customers. He said, "Anything that didn't have a customer contract and a customer commitment that we absolutely have to deliver on is now no longer a priority."
Scroggie also said the company must rebuild trust before restarting the affected work. He did not reveal how many projects would face suspension. NextDC listed 11 data centers in development or planning in its 2026 annual report.
The company also faces a major ownership development following its recent share price decline. Goodman Group and its partner Digital Realty acquired a 9.9% stake in NextDC. The investment amounts to approximately USD 715 million.
Both companies said they currently have no plans to make a takeover offer. However, they remain open to working with NextDC's board and management. Their potential collaboration could help the company address its current challenges.
The latest decision highlights a growing problem for Australia's data center industry. AI services and cloud platforms require large amounts of electricity to operate. Power shortages and local opposition could slow future data center projects.
NextDC now faces the challenge of balancing customer commitments with expansion plans. Its next steps will depend on securing reliable power and rebuilding community trust.
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