Posted on May 11th, 2024

The unintended impact of ChatGPT, Nvidia’s meteoric rise in stock price, Tesla’s takeover of the EV market, SpaceX’s Falcon 9 reusable rocket and your kids addiction to Roblox; unprecedented growth in Data Center development. Without massive investment in the growth of the data center industry, the future of AI and just about everything else digital, cannot be realized. The future of our Economy and quite possibly the advancement of the human race, now falls squarely on the shoulders of the Mission Critical industry and its ability to grow at a rate unseen in modern history.

The data center market was valued at 301.8B in 2023, and is expected to grow at a CAGR of 10.5% during 2024–2030, to reach 622.4B by 2030.
Another research institute predicts the global data center market growth at a CAGR of 21.98% during 2022-2026.
The hyperscale market is projected to grow by 20% annually.

These numbers don’t seem to reflect our current reality; we need to throw out the old model for predicting the future growth of Data Center development. Given the exponential demand of our digital economy, we simply can’t build Data Center’s fast enough.

Data Center digital infrastructure is the engine driving our modern economy, powering everything from the internet, to your cellphones, that spontaneous late night Amazon purchase, your OpenAI generated images, the Tesla Cybertruck in your driveway and the new pair of Apple Vision Pro’s you just bought with your tax refund. Let’s look at three trends that will keep driving Data Center expansion, growth, and sustainable design in 2024 and beyond!

1. The Emergence of Artificial Intelligence

AI is poised to change the very fabric of our society and usher in a new age of Technological advancement, with data center real estate and digital infrastructure acting as the beating heart and nervous system of this paradigm shift.

A great example of AI-driven demand is Nvidia, their new GeForce RTX 40 SUPER Series will drive advancement in AI, HPC, gaming, creative design, autonomous vehicles, robotics and more. These graphical processing units will power most of our new Artificial Intelligence and Machine Learning applications. Unfortunately they require tremendous amounts of power, while creating excessive amounts of heat, forcing Data Center designers to embrace alternative methods of renewable energy generation and the rapid adoption of liquid cooling technologies.

Another way to look at this unprecedented challenge created by technological advancement, Nvidia's H100 GPU has a peak power consumption of ~700W, which is more power than the average American household. Nvidia is forecasted to sell 1.5 – 2M H100’s in 2024. Industry experts are predicting Nvidia's H100 GPUs will consume more power than all of the households in city of Phoenix, Arizona, by the end of the year! By 2030, 20% of the world's energy could be consumed by microelectronics.

Not only do we need to build Data Centers at an mind boggling rate to keep up with advancements in technology and societal demand but we will need to design them more sustainably, pushing the boundaries of energy efficient cooling technologies and onsite renewable energy generation.

2. The Cloud is still King, for Now.

Paraphrasing, Andrew Schaap, CEO and Board Member of Aligned Data Centers,

“AI might be hogging the data center spotlight, but demand from cloud services providers (CSPs) will remain a dominant force in 2024. Cloud adoption has risen more than expected in recent years, driving ever-larger deals with data centers…..As AI and cloud grow side-by-side, the lines have blurred. For example, because all CSPs participate in AI, their data center needs for it and cloud are mixing….To meet growing AI demands, CSPs sometimes change the usage specified in their contracts. Providers that roll with the punches will fare better.”

Well said Andrew, there is no doubt that those who adapt first and iterate best, will carve out a very strong position in this new Digital Economy.

3. Sustainability to the Rescue, ESG has Arrived.

What is Environmental Social Governance (ESG)? Surely a term that has raised a few eyebrows and frowned the lips of many procurement managers and C-level folks over the past 5 -10 years. Let’s take a quick look back to help bring this into focus. The LEED (Leadership in Energy and Environmental Design) rating system hit the scene in 1998, adopted by the USGBC, and launched with the help of the Federal Energy Management Program. During the early years it was tough to convince Building Owners to invest and build with Life Cycle costs in mind. I’m happy to say, the days of designing and building infrastructure with a first cost mentality are finally coming to an end. During H1 of every calendar year, there is a new race in Sustainability, with every VP of ESG scrambling to compile last year’s performance numbers in preparation for the release their Annual ESG report. It is now common practice for Data Center Owner Operators and Enterprise companies to showcase how they're taking action to shrink their environmental footprint.

Climate change, corporate branding, investors demand, government regulation, and a new generation of environmental champions are demanding that we do more to protect our Earth and its precious natural resources. ESG aka Sustainability was once perceived as a nice to have, now its flexing its muscles as the go way to differentiate yourself from the competition. With the European Union recently adopting the Energy Efficiency Directive this year and the US following close behind with the pending SEC Climate-Related Disclosures proposal, we are no longer living in a kick the can down the curb world, when it comes to our impact on the environment. In fact, the State of California passed SB-253 (The Climate Corporate Data Accountability Act) & SB-261 (Greenhouse Gases: Climate-Related Financial Risk law), in 2023, requiring public and private companies that do business in California to disclose their greenhouse gas (GHG) emissions and their climate-related financial risks.

This shifting environmental paradigm will surely force companies to disclose their carbon emissions, energy usage and proactive measure taken to ensure responsible stewardship of our environment. The Mission Critical Industry must accelerate its growth to usher in this Age of Technological Enlightenment but it cannot come at the expense of our children’s future. We must do everything in our power to design, build and operate environmentally friendly data centers, ensuring a sustainable future for generations to come.

Sincerely,
Raymond Burrell
LEED AP BD+C