Australia's busiest internet route could get a speed boost of up to six times after Telstra launched the first major milestone in its $1.6 billion fibre optic network.

The company activated the Sydney-to-Melbourne coastal connection of its internet project on Tuesday, promising transmission rates of up to 700 gigabits per second on a single fibre channel.

Telstra also revealed a study found the network could boost Australia's gross domestic product by $29 billion in 2040 and support more than 84,000 jobs in fields such as artificial intelligence, agriculture, healthcare and defence.

The announcement comes after the federal government named AI as a national priority and the Productivity Commission estimated the technology could add more than $116 billion to the economy over the next de

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