HOW AI IS REALLY IMPACTING THE SECTOR

AI will undoubtedly be an area responsible for one of the largest drivers of data centre development and expansion in the past decades and this is driving the confidence in demand levels for data centres. However, arising from these are the concerns around whether the industry can keep up and deliver the necessary infrastructure power, power densities and cooling solutions to address the requirement for extreme high-performance servers, storage systems, and superfast networking infrastructure and specialised hardware accelerators – all of which use substantially more power and cooling.

In our recent independent survey of 3000 senior data centre professionals, we asked respondents how they believe this is impacting the operation of their businesses and what the potential effect is on their data centre strategies. 

LIMITING GROWTH

Most public commentators agree that AI adoption will grow significantly over the next few years. For example, Marketsandmarkets suggest that the AI market is projected to reach some US $1,339 billion by 2030, experiencing substantial growth from its estimated US$214 billion revenue in 2024. 

 However, there is evidence that power constraints are already limiting growth in data centre space in some mature markets where competing demands on the grid have seen developers and investors looking elsewhere for alternative opportunities. According to Savills World Research, London, Frankfurt, Amsterdam, Dublin, Northern Virginia, Seoul, Singapore and Tokyo have all already suffered from a tightening of power availability, whilst other peripheral and less power-competitive locations will have become more attractive to data centre market growth.

Some 87% of our survey participants agree to some extent that restricted power availability and appropriate data centres with the capability to handle concentrated workloads is already impacting the speed of AI adoption. This is a similar level to the 85% who held the same view earlier in the year. Around 86% of our survey participants expect their data centres to be more efficient as a direct result of AI applications, a small drop on the 90% who reported on the same metric in our summer report, but still overwhelmingly supportive. 

DEMAND IS STILL GROWING

Despite this, 85% of our respondents have reported experiencing an uplift in demand as a direct result of AI over the past year -  this is up on the four-fifths who reported the same some six months ago. Looking forward, they remain firmly convinced that that demand will continue to be driven by AI growth in the coming year. 87% believe that the next 12 months will see a notable uplift in demand directly linked to AI products/providers, a proportion unchanged on that seen six months ago.

USING AI TO REDUCE POWER USAGE

Whilst data centres are crucial in servicing demand for AI, they also utilise AI to help facilities drive to be more efficient, resilient and reliable. The survey provides more evidence that our respondents are using a variety of tools to try to achieve those aims, with 70% of participants reporting its use in their business.

Power management and Smart cooling were mentioned by around 58% of our survey participants. Power management includes balancing power usage across the data centre as well as predicting power usage allowing allocation of non-critical tasks to off-peak times thus avoiding excessive energy consumption and maximising power efficiency. Smart cooling uses AI and machine learning to adjust cooling parameters helping to further optimise energy use through predictive conditioning. 

CHANGING LOCATION

In some locations, concerns over increasing power draws by the data centre industry have led to policy makers at both local and national level introducing provisions limiting the volume of data centre development. This may represent an opportunity for more peripheral locations where power availability is higher, and a more favourable governance exists. Many of our respondents (71%) agree that such locations will benefit in this way, similar levels to those measured six months ago. 

With the expected rise in overall demand for power, it is not surprising that organisations will look to control their exposure to rising energy costs through the demand for power efficiency where possible.  Some 94% of our respondents expect a rise in the cost of power to increase the demand for power efficient data centre space over the next three years, a notable increase from the 80% noted six months ago. 

MOVE TO RENEWABLES

It is clear that the data centre industry is following most of the major industries by continuing to prioritise enhancing energy efficiency and the utilisation of renewable energy sources. The financial carrot that power efficiencies bring to operators is evident but there remains a wider political and social stick for stronger protection for the environment. As the data centre industry increases its relative importance as a user of power, a move to renewable energy represents an important step towards the creation of a more sustainable and environmentally conscious digital infrastructure.  

Results from our survey suggest strongly that the industry remains deeply engaged in providing appropriate power solutions; 91% of respondents expect to see at least 90% of their data centre energy usage sourced from renewable generation over the next decade. This reflects an increase from the 86% we recorded in our last survey.

CONCLUSION

The power implications of AI for the data centre sector are significant and innovation will be key to tackling these in the long term. At BCS we are working closely with our clients advising on technologies like liquid cooling, modular data centres, and artificial intelligence-driven energy management systems which can dramatically improve efficiency. We are actively supporting relationships with energy providers to pave the way for smarter, more resilient energy ecosystems.

Ultimately, the industry faces a delicate balancing act. Data centres are critical to economic growth and technological advancement, but their power needs must be managed sustainably and equitably. Addressing the power issues facing data centres requires a coordinated effort between governments, industry, and energy providers. The time to act is now.