Rising use of AI is driving data centres to innovate

The dramatic growth of AI, and the technology’s near overnight adoption by millions of users, comes with its own consequences. Today, the uptake in AI adoption is putting pressure on the data centre market to stay ahead of demand by planning for multiple potential scenarios around performance expectations, government regulation, and the future shape of the AI industry.

According to a report by EY, AI-driven applications - including their underlying compute and storage requirements - are positioned to drive the next phase of data centre industry growth.

“Building on previous paradigm-shifting technologies such as mobile and cloud, AI represents the next era of potential demand growth and disruption for the data centre industry,” its report authors say. “Already, some companies are looking to reconfigure their data centres to account for the additional computing power – and related energy consumption and cooling designs – that AI requires. All data centre industry participants, however, need to be proactive in approaching this trend, building strategies to address the shifting landscape and staying ahead of future requirement evolutions.”

This trend is echoed by JLL’s new Global Data Center Outlook, which suggests the mass adoption of cloud computing and AI is driving exponential growth for the data centre industry.

“After the pandemic removed the four walls of the workplace, our new world of hybrid work has created an unprecedented need for digital technology. Employees are looking to their companies to create a seamless experience wherever they choose to work, requiring intelligent technology solutions to bridge the gap between the physical and the digital,” said Andy Cvengros, Managing Director at JLL. 

“As this reliance on digital technology increases, the data centre industry is experiencing impressive growth and catching the eyes of investors and lenders as a strong, alternative asset class that has been relatively unimpacted by continued economic uncertainty.”

AI tools like ChatGPT accelerate growth of data centre industry

The gold rush of AI today is driving growth even further. Following the rapid development of AI tools like ChatGPT, the potential of generative AI to transform industries in 2023 is expected to accelerate demand for computing power in data centres. And with AI offering increased data usage and computing efficiency benefits, half of all cloud data centres are expected to use AI by 2025.

With the spike in interest around generative AI, a lot of attention has been paid to the high demand and short supply of advanced graphics chips (GPU) – but data centre capacity is rapidly becoming an even bigger issue, comments data centre solutions provider DataBank’s CEO, Raul Martynek. 

“Even if advanced GPUs can be obtained, there needs to be a data centre with spare power, cooling and network capacity to put them,” he said. 

“Before the frenzy around generative AI, the data centre industry was already under demand pressure from ongoing enterprise digitisation and cloud demand, with little extra capacity. Now, AI developers are racing to snatch up GPUs and high-performance computing (HPC) racks putting additional stress on an already limited resource.”

Because of the high costs and time to deploy, data centres are typically built in a just-in-time delivery model based on forecasted demand. However since the rapid increase in interest in AI deployment was a relatively recent phenomenon, Martynek explains that most data centre operators have not factored it into their forecasts.

“This is in addition to the power constraints posed by the transition to electric energy and the already significant absorption of data centre capacity and power in a number of core markets,” he describes. “Generative AI demands as much as five times the power of traditional workloads, and the current grid is ill-equipped to handle it. To make matters worse, more frequent heat waves like the one we are seeing globally will further strain existing power infrastructure.

“Without adequate data centre infrastructure to support the HPC hardware required to train and operate AI models, AI adoption could be slowed.”

The future of AI adoption and how it will affect the data centre industry

As Martynek explains, with AI adoption still in its early stages, it is hard to predict how things will evolve. “There is no question in my mind that the power of AI has been recognised and that we will see a significant amount of investment in a wide range of AI applications for a wide range of use cases,” he says.

“The next few years will be about fleshing out these use cases and putting them into production. The fundamental role of data centres will not change - as the foundation for technology adoption - but I think we will see more and more data centres built to accommodate the higher power and cooling requirements of GPU infrastructure.”

With data centre demand outstripping supply, the industry as a whole will need to change. “Right now, data centre demand is outstripping supply and I think that will remain that way for several years since average development timelines for new large-scale data centre supply take 24 to 48 months.”