But the announcement came with a warning that the nation could fall behind in the global AI race if it failed to secure enough high-capacity connections, with the future of the technology to be decided in as little as five years.
Vocus announced its investment on Wednesday, revealing plans to build a long-haul fibre link between Australia's two largest cities to meet growing AI demand from businesses.
The news comes a week after the company completed a 2000km fibre network between Perth and Port Hedland in Western Australia, and will pit its network against rivals from NBN Co, Telstra and HyperOne.
Australia has become a major focus for AI investment from local and international companies, with multibillion-dollar data centre commitments from firms including Amazon, Microsoft, AirTrunk and CDC Data Centres.
But the fibre connections between these developments could slow progress, Vocus chief executive Andres Irlando said, and stifle Australia's sovereign AI ambitions.
"If you look at the growth over the last five years and the demand for data centre capacity, for example, it's skyrocketed," he told AAP.
"What hasn't kept pace with that is the fibre infrastructure, which I like to refer to as the critical arteries that make the digital infrastructure ecosystem actually work."
Vocus' fibre network between Sydney and Melbourne would use ducted fibre technology considered the standard in the US and Europe, Mr Irlando said, and is due to be completed in 2029.
The link will form part of the company's Australian Digital Infrastructure Platform, connecting more capital cities and regional towns to high-capacity fibre, and would be completed within years rather than decades to ensure Australia could capitalise on the AI boom.
"The decisions that are being made by global customers, as well as local customers, are happening now, and they're looking for where is there going to be capacity to support their use cases in the relatively near future," he said.
"The winners and losers in the global arms race around AI are going to be determined in the next five to eight years."
Several companies have built fibre networks in Australia, including NBN Co that is upgrading many of its copper connections with fibre, and Telstra InfraCo that is developing a national fibre network to support AI adoption.
Building smart infrastructure, including fibre-optic connectivity, was named as a key priority in the federal government's National AI Plan, released in December, to make the country a leading destination for tech investments.
10°C