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The data centre backlash became a real political force.

A Capital Brief/DemosAU poll of 1,562 Australians found just 23% would support a data centre in their area, with 44% opposed — barely ahead of nuclear power plants at 20% support. A separate Primary survey of 1,000 people found 83% didn’t want to live near one and 86% were worried about AI-linked job losses. What happened around that:

• NSW stripped councils of their automatic power to refer data centre projects to the Independent Planning Commission and doubled the public objection threshold, aiming to unlock a $50.3 billion pipeline. Developers committing to energy and water principles get 75-day assessments.
• Tasmania opened a parliamentary inquiry into whether its planning system can handle AI data centres at all — triggered by Firmus’s three northern sites at St Leonards, Bell Bay and Wesley Vale, which together would draw **around 20% of the state’s power.
• Goodman Group CEO Greg Goodman conceded** some of its $15 billion pipeline “won’t come to fruition.”
• Anthropic is hiring an Australian community engagement manager to work with councils, and reportedly wants more than 1.4GW of Australian capacity. CDC Data Centres and Firmus have hired for the same kind of role.
• Equinix, AirTrunk and Microsoft publicly conceded the industry needs to do more. Context worth citing: Westpac valued the Australian AI infrastructure pipeline at $155 billion — around $200 billion including the renewables to power it, roughly 10% of GDP.

Australia’s AI rulebook started to take shape — from four directions at once

• A national AI framework and a new Office of AI inside PM&C, with mandatory Australian Standards going to National Cabinet and legislation expected early 2027. After national cabinet, Albanese said he has “buy-in on Australia’s national AI laws.”
• Parliament launched its broadest AI inquiry to date, ahead of those reforms.
• South Australia took both sides in a fortnight — signed an MoU with OpenAI (believed to be the first between an Australian state and a major AI company), then days later announced a Royal Commission into AI, starting 1 October 2026, reporting 1 July 2027, with a $3 million budget.

NSW is recasting its AI office inside the Cabinet Office; Queensland is creating an Office of Commercialisation and appointing a chief innovator under a 15-year plan. The quotable friction: Albanese said Australia can lead the world on AI regulation, then admitted he doesn’t personally use AI. AIML chief scientist Anton van den Hengel: “So far, Australia’s focus has been on regulation, not creation. Regulation defines us as takers, not makers… What we’re missing isn’t regulation. What we’re missing is capability.”*

Canva got repriced — hard

Blackbird and Airtree cut their carrying value 17% to US$34.9 billion (A$49.3 billion) after independent external assessments. Fidelity marked it down for a second straight quarter.

Broker Hiive offered fund managers Canva shares at a US$30 billion valuation — a 28.5% discount to last year’s company-arranged selldown. Canva says it doesn’t recognise those transactions.

The cause: Canva’s AI bill. Unexpectedly heavy use of Canva AI pushed serving costs past assumptions, forcing it to pause the Canva AI 2.0 rollout, delay products and cut its revenue growth forecast. Q2 revenue was $921.9 million, up 25% year-on-year but below guidance; it now expects ~20% growth this year, down from 30% signalled and 38% last year. It has since cut cost per task by nearly 90% by routing free users to its own models.

Reports say the markdowns could delay the much-touted 2027 Nasdaq IPO. Fair counterweight for the newsletter: Bronwen Clune’s point that Blackbird, Airtree and other early backers have already taken substantial money off the table through years of secondary sales — “much of the downside” sits with later-stage investors who bought in at US$25 billion and above.

Atlassian’s turnaround was the other side of the same story

First quarterly operating profit in more than two years: net income of US$139 million on revenue of US$1.8 billion, remaining performance obligations up 44% to US$4.8 billion. Shares jumped more than 30%, and Mike Cannon-Brookes announced he’d personally buy up to US$250 million of stock. His line: “AI is the best thing that ever happened to Atlassian.” Employment Hero founder Ben Thompson declared “SaaS is back.” Context: Atlassian cut 1,600 jobs — about 10% of its workforce — in March.

The early-stage squeeze is real, and the data now says so

• Cut Through Venture Q2 2026: $1.7 billion raised in the quarter, $3.5 billion for the half — but just 31 sub-$5m rounds, the lowest early-stage deal count since 2020. The second-strongest start to a year on record at the top, a genuine squeeze underneath.
• State of Australian Startup Funding 2025: average time from first investor conversation to money in the bank has doubled from six months to twelve; 40% more diligence requests than the year before; 390 reported deals, down 20% on 2024. This is the single most useful chart-able datapoint for the newsletter.

“AI-resilient or out” — AirTree’s message to its own portfolio

AirTree told portfolio founders, in a tightly held investor update, that it will sell out of companies that cannot show their business is safe from AI. It puts 88% of fund value in “AI-resilient positions” while conceding low certainty given the pace of change, with about 14% of portfolio net assets in an active management bucket focused on hard pivots, cost-cutting, extended runways and consolidation.

Australian VC is putting boots on the ground in San Francisco

Airtree — $2 billion under management — is opening its first US base, with principal Sid Kasbekar relocating from Sydney. Partner Jackie Vullinghs: “We’re putting boots on the ground in the US now so the diaspora stays connected to Australian capital, talent, and expertise.” Startmate has restarted its SF trips (19 founders in May, now a fixture of every cohort), Galileo rotates staff through the city, and Blackbird is considering a bigger presence. The counter-argument, from Folklore: “many founders are beginning to believe their only option is to move to the US… This rush to prematurely access US capital risks slowing down an Australian technology flywheel.” Context: California attracted $510 billion in VC over the past eight months, almost double last year’s record.

The CGT carve-out fight matters more than its column inches suggest

Independent MP Allegra Spender warned Labor’s proposed startup CGT carve-out — which would let founders, option-holding employees and investors keep the existing 50% discount up to a $10 million lifetime cap — would hit Australia’s most active startup investors. She’s arguing for a per-person, per-venture cap instead. Her submission: a lifetime limit “discourages repeat investors, employees and entrepreneurs that are important to maintain an onshore innovation sector.” Separately, CEDA found Australia’s entrepreneurial base is shrinking, with the decline sharpest among the wealthiest households best placed to start a business.

SafetyCulture is now Mitti

The $2.5 billion Australian unicorn rebranded after 22 years, leaning into AI-powered operations and insurance. Used by 80,000 organisations and more than two million frontline workers. The name comes from its insurance joint venture with QBE, which it took full control of in 2023 and which has written nearly $200 million in cumulative gross written premiums in Australia and is licensed across 51 US jurisdictions. Founder Luke Anear returned as CEO in February.

The “AI is taking the jobs” claim doesn’t survive contact with the data — yet

• WiseTech announced plans to axe 2,000 roles, has cut 1,200, and claims a 45% increase in engineering productivity with more than 90% of its coding done by or with AI.
• But Tech Council of Australia research on ABS data found the number of Australian software engineers grew 7% in the year to November 2025, with “no discernible evidence” that ChatGPT’s release caused a disproportionate decline in early-career jobs. IBRS analyst Joseph Sweeney argued Microsoft and Atlassian blamed AI for cuts that were really about over-investment and margin pressure.
• Meanwhile Australia’s tech sector grew 4% last year, outpacing the 3.1% across all businesses. Relevance AI founder Jacky Koh: a five-person team using AI now achieves output that would have required 50 to 70 people two to three years ago.
• EY-Parthenon modelling suggests AI adoption could add 36,000–44,000 jobs and lift GDP by as much as 3.6% by 2036.

Stripe planted a flag in Airwallex’s territory

At Stripe Tour Sydney, Stripe launched Treasury in Australia — multi-currency banking-as-a-service. Stripe says it serves roughly one million Australian merchants and adds about 37,000 a month. Airwallex founder Jack Zhang on LinkedIn: “Very familiar with this one :)… we went the slow way and secured 85+ licenses over the last decade, letting us run 24/7/365 FX across nearly 1,000 currency pairs and 60+ currencies.” Airwallex took over a cafe opposite the ICC and plastered nearby bus stops with ads.

International

AI is now eating the venture market outright

• AI startups raised over US$407 billion in H1 2026 across 3,500 deals, against US$264 billion in all of 2025. OpenAI and Anthropic alone accounted for more than half — about US$217 billion.
• Five companies took 78% of all venture deal value in Q1 (OpenAI, Anthropic, xAI, Waymo, Nscale).
• AI is nearly 62% of all unicorn value, with Anthropic and OpenAI alone at US$1.8 trillion, or 22% of the US$8.2 trillion universe.
• The catch: strip out AI-driven paper gains and the median 2025-vintage IRR is -2%, down from 17.4% two years earlier. The average DPI for 2021-vintage funds is 0.05x — the lowest five-year DPI multiple this century. Since 2022, net cash flow to LPs has been negative US$202 billion.
• Concentration on the fund side too: billion-dollar-plus funds now take 68.3% of every dollar raised, and 12 firms account for nearly three-quarters of total commitments.

The SaaS reset entered its second phase

Public investors started rewarding AI infrastructure again in Q2 but most of the post-February valuation damage stuck. Silver Lake was reported in talks to take Workday private (shares +18%). UBS’s Karl Keirstead reported blue-chip executives “absolutely articulating a view” that they want spending with software vendors down 30% over the next three years. Datadog fell 19% in a day after flagging a slowdown caused by one large AI customer reducing usage. IBM shares crashed on falling mainframe purchases as customers spent on AI instead.

Space tech has already beaten all of 2025

US$11.3 billion across 244 deals through June, past US$10.1 billion across 433 deals in all of 2025. Median round more than doubled to US$14.5 million. But seed fell to about 1.5% of capital deployed — the lowest share on record, with venture-growth and late-stage taking 87.4%. The same barbell showing up in Australia.