I suspect Australian FinTech would be more interested in colocating near exchanges instead of trying to beam their orders through space, but I don't work in the sector so I can't say for sure.

Totally different use cases.

If you want to observe events at one exchange and send orders to another, all that matters is total latency. For that use it doesn't matter whether your servers are in the same room as one of the exchanges or 200 miles away from either one.

It's true that total latency is what matters, and minimising latency by sitting near one of them and taking advantage of low-latency connections between exchanges sounds reasonable.

Does this have a name? Something like "a race to ridiculousness?" It's so bizarre that it matters that someone places an order a few ms before someone else. And it's probably ns now. No time to stop and think,... just be faster than someone else.

Capitalism? :P