Earth, Ether, Fire and Water: An Elemental Data Center Story
A convergence of interest between the energy-hungry needs of major Internet players and the Trump administration's 'energy dominance'
When people talk about "the cloud," and the way in which the Internet forms the basis for distributed "cloud computing," most of us don't take the cloud concept literally.
But I've come to appreciate that data centers, the literal heart of the Internet, seem to rely in equal measure upon each of the four elements: Earth, Air (or Ether), Fire and Water. Data centers need a plot of real estate. They need the fiber-optic lines that bring Ether-net connectivity. They need the energy that powers abundant electricity. And, in almost all cases, they need they liquid cooling supplied by water.
That's why it's best to get elemental when thinking about the trade-offs necessary to build data centers: What's the price of land? How much does it cost to string long-haul and middle-mile fiber? Where is energy plentiful and reliable? Is water available?
Energy is driving the data center debate
Internet infrastructure is key part of Broadband Breakfast's mission to build a community focused on better broadband and better lives. But we can't just focus on broadband access to the home. We also have to wrestle with what some might call the Internet's "back office": The cloud where the data centers live.
A centralized physical facility that houses and manages computing and networking equipment to store, process, and distribute data and compute, data centers have become even more essential as artificial intelligence places a heavy strain on America’s energy grid. That's drawing new attention to the energy-hungry expansion of data centers, as well as the source of electricity that powers the compute. This will be the subject of "Data Centers, Nuclear Power and Broadband," a one-day conference on Thursday, March 27:
Broadband Breakfast
Politics makes the irony richer.
Big Tech companies like Google, Meta, Microsoft and Amazon power the biggest of these data centers, the so-called "hyperscalers" that are are necessary to retrieve and to process the trillions, quadrillions, and quintillions of bits of information necessary to manage our digital lives. And tech has made commitments to use advanced energy, particularly solar and wind, so as to avoid carbon-based fuels powering climate change.
In other words, Big Tech bet on advanced energy just at a moment of increasing demand. That may be a moment in which solar and wind – with their large variability in supply – are particularly inapposite.
That's led to a surprising convergence of interest between the energy-hungry needs of major Internet players and the Trump administration's embrace of "energy dominance," including a stated desire to drill for oil and fossil fuels.
Against this backdrop, one source of energy has emerged as a new favorite across the entire political landscape. It is at once very familiar and yet long-neglected, a potentially abundant source of energy: Nuclear power.
The summit on Thursday will examine the role of nuclear power, the future of electric grid capacity, and the regulatory landscape shaping broadband and energy infrastructure investments in the AI era.
Engines of growth and energy guzzlers
As Broadband Breakfast reported in a background piece, "AI Revolution Sparked Growth in Data Centers," during the "12 Days of Broadband" end-of-year articles:
“Data centers are not new. But the way we’re using them is,” said National Telecommunications and Information Administration Administrator Alan Davidson in September, speaking at a Center for Strategic and International Studies event on data center growth. “Even before artificial intelligence supercharged demand, data centers had become a linchpin of our digital economy.”
Nowhere is this strain more evident than in Northern Virginia, known as “Data Center Alley,” where data centers reportedly consume 24% of Dominion Energy’s power. While estimates vary about how much of U.S. electricity is consumed by data centers, some projections have the figures rising to between 4 and 6% by 2026, and even as much as 12% by 2028.
While national growth is striking, the industry’s geographic concentration amplifies local challenges. Just 15 states account for 80% of the national data center load, with hubs like Northern Virginia; Prineville, Oregon; and Dallas-Fort Worth, Texas, leading the way.
This dramatic growth has reshaped local economies and sparked both opportunities and challenges. These regions have benefited from job creation and infrastructure investments, but the strain on energy resources and local environments has raised alarms.
Becky Coleman of Gate City in Scott County captured these tensions in a piece published in Broadband Breakfast: “The growth of data centers and the availability of energy have got to pace each other. Otherwise, there will be a rush to build data centers with a possibly thoughtless approach to powering them, particularly in rural areas.”
Jericho Casper
See also all Broadband Breakfast articles on energy:
Broadband Breakfast
Bringing the elements together
One of the best places to understand the future of data centers, as well as other facets of digital infrastructure investment, is at the annual Metro Connect conference. It took place four weeks ago in Fort Lauderdale, Florida. At the conference this year, data center themes emerged around managing both power and connectivity needs.
From the reports about the event, several insights emerged.
- Not all data centers are alike: The needs of hyperscalers can differ substantially from multi-tenant data centers, as well from the needs of (merely) connecting broadband access services through Internet Exchange Points (IXPs).
- Liquid natural gas may serve as an important bridge technology – or, some argue, even a permanent source of energy – for energy-starved data centers.
- In 2024, demand for power by data centers stood at six times the level of four years prior, in 2020.
- Data center developers use to located their facilities around the broadband and telecom needs of the marketplace. Now, sites are selected because of proximity to lower-cost electricity, forcing longer fiber connection lines.
- A wide variety of energy sources will power data centers for the near-term future.
Data Centers See Enterprise AI Demand Creating New Opportunities
While hyperscale data centers capture headlines with gigawatt-sized projects, mid-market data center operators are finding substantial growth opportunities serving enterprise artificial enterprise demands, according to industry leaders at the MetroConnect conference here on Feb. 24....
Unlike hyperscale facilities that can be purpose-built for specific customers, mid-market operators face the challenge of designing facilities flexible enough to accommodate various workloads while supporting advanced cooling technologies needed for AI computing.
Drew Clark
On-Site Gas Generation a Solution to Data Center Power Crunch: Expert
On-site natural gas generation offers a viable alternative to grid connections for power-hungry data centers, according to Jim Summers, CEO of GPC Infrastructure, who presented Feb. 24 at the MetroConnect conference here....
"The explosive growth of hyperscale data centers is creating insatiable demand for power that will exceed the ability of utility providers to expand their capacity faster," Summers told attendees. "The cost of power to operate data centers may increase significantly as operators economize on power, and 40% of AI data centers will face operational constraints due to power availability by 2027."
Drew Clark
With Unprecedented AI-Driven Demand, New Financing Solutions Needed
"In 2024, we're seeing something like 6.7 gigawatts of data center demand, which is more than six times what it was in 2020," said Kush Urs, managing director of telecom and digital infrastructure investment banking at Guggenheim Partners. "We haven't seen this kind of growth ever in this sector, and the capital markets are still trying to rapidly get their head around how to finance all of this growth."
Drew Clark
Because of Power Availability, Fiber Providers Racing to Connect Remote Data Centers
The data center landscape is undergoing a fundamental shift with power availability now dictating location decisions, forcing fiber providers to adapt with unprecedented long-haul infrastructure builds, industry leaders said Feb. 25 at the MetroConnect conference.
"It used to be the decision was made, 'Hey, I need to be somewhat near a fiber footprint.' Now it's 'Where's the power?' And then everyone else has to figure out how to get to me from there," said A.J. Moul, vice president of wholesale for Frontier Communications....
"We've been dropping data centers in the metros where the long-haul fibers crisscrossed," said Dan Davis of Arcadian. "Well, we've sucked up all the power where the fiber crossroads are."
This shift has extended project timelines dramatically. While building fiber to a data center within metropolitan areas might have taken 2 to 2.5 years, rural connections spanning hundreds of miles can now take 3 to 5 years to complete.
Drew Clark
Data Center Tension Between Power Demands and Sustainability Goals
Charley Daitch from Rowan Digital Infrastructure stated their facilities are backed by 100% renewable energy, either from their portfolio or their customers'.
The industry is exploring multiple approaches to sustainability, including low-carbon building materials, water conservation strategies, and on-site energy generation. Panelists discussed the potential role of natural gas as a transitional fuel, though acknowledging it remains carbon-based.
"Is natural gas better than coal? Yes. Is it better than nuclear? No," Long said.
Utility infrastructure emerged as a significant bottleneck, with panelists describing the interconnection queue for new power sources as "a nightmare." Traditional utilities accustomed to 1-2% annual growth are now facing demands for 20% increases in some regions.
Drew Clark
