Northern Territory Deputy Chief Minister and Mining and Energy Minister Gerard Maley is defending his handling of a potential conflict of interest connected with a proposed large-scale artificial intelligence data centre outside Darwin.

The controversy centres on a proposed $40 billion hyperscale AI data centre being developed by Beetaloo Digital, a subsidiary of Beetaloo Energy. The Northern Territory Government has granted the company exclusive access to about 185 hectares of Crown land at Weddell for 12 months while it assesses the project's viability, seeks investors and develops its plans.

Questions about the project intensified after it emerged that Maley's sister-in-law, Bethaney Maley, works for Beetaloo Digital in a strategic engagement role. She was also present at the July announcement of the land agreement, where she was involved in distributing media material.

Maley has rejected suggestions that he failed to comply with the Northern Territory's disclosure requirements. Speaking to ABC Radio Darwin, he said he had informed Chief Minister Lia Finocchiaro about the family connection and had followed the applicable rules. He also said he did not believe there was an actual conflict of interest.

The minister said the land agreement itself was made by Lands and Planning Minister Joshua Burgoyne, rather than by him. Maley said his role as Mining and Energy Minister was to promote the Territory's resources and energy industries and that he had not been the decision-maker responsible for granting Beetaloo Digital access to the land.

The proposed data centre is intended to become a major digital infrastructure project in the Darwin region. Beetaloo Digital says its concept combines gas-fired generation, renewable energy, energy storage and advanced cooling technology to support large-scale artificial intelligence and high-performance computing operations. The company identifies approximately 185 hectares of greenfield land at Weddell as part of the opportunity.

The project has attracted interest because of its potential scale. If developed, it would require substantial electricity generation and supporting infrastructure. The company has promoted a model that would combine reliable gas generation with renewable energy and storage, with the aim of creating an energy system capable of supporting future data-centre expansion.

However, concerns about transparency have become a major part of the political debate.

Labor MLA Dheran Young, whose electorate includes the proposed data-centre area, said residents have legitimate questions about the project and the government's decision-making process. He said there had been no sufficient community consultation and raised concerns about possible impacts involving water, electricity, noise, the environment and the rural lifestyle around the proposed development.

Independent MLA Justine Davis also questioned whether the family connection could create a public-trust issue. She argued that Territorians need confidence that government decisions are being made independently and transparently.

The Environment Centre NT has similarly expressed concern about public confidence, while acknowledging that there is no evidence presented that Maley failed to make the disclosures required under the rules. The organisation said the broader issue was whether the government's handling of the relationship provided sufficient confidence to the public.

Chief Minister Lia Finocchiaro has defended the government's handling of the matter. She said Maley was not a decision-maker on the project and that his sister-in-law's role was as a media and strategic-engagement employee rather than someone responsible for making government decisions.

Maley has said that, going forward, he will remove himself from any potential conflict of interest involving the project or other matters where such a conflict or perceived conflict could arise. He has also maintained that he will continue following the government's ministerial rules and guidelines.

The controversy comes as the Northern Territory seeks to attract major investment in energy and digital infrastructure. Supporters of the data-centre proposal argue that a project of this scale could create construction and long-term employment opportunities while strengthening Darwin's position as a regional technology and energy hub.

The project is still at an assessment and development stage, meaning the proposed data centre has not yet been built. The 12-month land arrangement gives Beetaloo Digital time to investigate the site's suitability, secure investment and determine whether the development can proceed.

For the Northern Territory Government, the immediate issue is balancing the economic potential of the proposed data centre with expectations for transparency and proper management of potential conflicts of interest.

Maley continues to deny that he improperly influenced the project and says he has followed the required disclosure process. Critics, however, argue that public confidence requires not only formal compliance but also clear transparency around family relationships and government decision-making.

The issue remains politically sensitive as planning for the proposed Darwin AI data centre continues.