Melissa Horne, a Victorian state minister, refused to back NextDC's bid to fast-track the expansion of its M3 data centre in Footscray, and in her reply accused the ASX-listed company's chief executive, Craig Scroggie, of using AI to prepare the approach. Her stated grounds were what she called basic factual errors, and she advised him to check AI-generated material more carefully in future. The exchange became public because Katie Hall, the Labor MP whose seat contains the site and a long-standing opponent of the expansion, released the letter.
The project is large by any measure. Expanded, M3 would cover 10 hectares, draw 225 MW and run 24 hours a day, seven days a week. The site sits in an industrial zone, but some houses stand 15 metres from its boundary. Hall told the planning minister in April that the site is within 500 metres of more than 800 homes, a kindergarten, maternal and child health services and Stony Creek. Residents have also raised the data centre's reliance on diesel generators during power outages, and the regular testing of those generators.
Scale and proximity have pushed the volume of complaints up. Residents argue the government approves these projects too quickly, without weighing their long-term effect on the neighbourhood. The correspondence between Horne and Scroggie shows that ahead of the Victorian state election, the government has begun paying closer attention to those complaints.
That attention cuts against years of state policy. Victoria has spent a long time courting data centre investment, and large data centres can use an accelerated approval pathway. Decisions by the planning minister on such projects cannot be appealed to the Victorian Civil and Administrative Tribunal.
That is the setting for Scroggie's letter of 3 September. He asked Horne to intervene in the planning minister's decision on NextDC's behalf — he went to one minister to lean on another. Several people familiar with lobbying practice described a chief executive writing directly as unusual; companies normally pay someone to do this for them. Horne, who belongs to the same party faction as Victorian Premier Ben Carroll, replied that she did not think it right to support the application and did not want to do so. NextDC then hired Ken McAlpine, a former adviser to the Labor governments of John Brumby and Steve Bracks, to lobby the state government.
The AI accusation is the most quotable line in the story and the thinnest part of it. Horne described the errors as basic, but the letter does not spell out what they were, and she has declined to comment further. Scroggie and NextDC have said nothing either. What remains is a minister's inference about how a document was produced, published not by her office but by a member of parliament campaigning against the project the document concerns. That is a political instrument and it is being used as one.
The more consequential detail generates no headlines: the pathway itself. A 225 MW facility with homes 15 metres from the fence can be approved by a single minister, quickly, with no tribunal to appeal to. Hall raised her concerns with Anthony Carbines, the state's AI minister, last month, and with the planning minister in April. Neither conversation gives residents a right of review, and the accelerated process is the reason the lobbying went where it did — to ministers rather than to a hearing.
The symmetry is hard to miss. In 2025 Scroggie posted a video from the M3 site on LinkedIn, calling the speed and scale of the expansion impressive and describing the company as building Australia's largest hyperscale AI factory, purpose-built for the new era of AI and accelerated computing — creating Australia's digital future fast, at scale, on its own infrastructure, sustainably and securely. The pitch to a minister who might have helped deliver that future was turned down on the grounds that it looked machine-written.
Horne was never the decision maker here. The planning minister is, and that decision is still open. NextDC has already swapped a letter from its chief executive for a professional lobbyist who knows the building; whatever went wrong on 3 September, the drafting tool was not the company's real problem.