Breaking through operational inertia to win the AI data centre race

There is global recognition that AI has a huge role to play in supercharging economic growth and productivity. But to take advantage, governments first need the infrastructure to support AI-compute. This has seen data centres being increasingly seen as a strategic resource. As such, there has been $22bn of global investment in data centres in first five months of 2024, driven by increasing spend in e.g. Gen AI.

This growing importance of data centres is reflected in government policy. The UK has recognised data centres as a critical component in boosting the UK’s AI sector. The UK government this year announced it would remove planning barriers to new data centres, and designate projects as “nationally important”. This has seen plans for two rejected data centres revisited, and seen the UK government now declare data centres powering the economy be designated as Critical National Infrastructure, providing protections from cyber criminals and IT blackouts.

Beyond the UK, Ireland is set to generate more than €4.5 billion in inward data centre investment by 2025, while Germany has denoted data centres as ‘the lifeline of the digitalised world’. In the US, President Biden attended the opening of a $3.3bn Microsoft data centre.

Despite this support, there are still major challenges that need to be overcome, with major data centre markets coming under pressure. In both Ireland and the Netherlands, new data centre developments are having to be paused due to concerns over power and space.

This is creating opportunities for new centres of data centre power to emerge – with the Nordics being one region that is embracing the opportunity to cater for global AI demand. One such scheme is the Norwegian Government’s data centre strategy 2.0, which makes it easier to establish data centres in Norway, but also outlines ways to better manage resource utilisation of waste heat from data centres.

Overcoming key challenges is vital to success

Clearly there is a massive opportunity for operators to provide the infrastructure required to enable AI and help drive economic growth. However, agility will be critical. Many operators are held back by an operational inertia that prevents them from adapting to a rapidly evolving environment. Six distinct roadblocks are limiting an operator’s ability to adapt:

1. The pace of change – with AI development happening so rapidly, the pace of change has become breakneck, making it hard for operators to keep up.
2. Accessing power – power shortages and the need for more sustainable power have made power access a major challenge.
3. ESG concerns – data centre operators can’t afford to overlook ESG requirements. Building fast means operators don’t have the time to be sustainable, meaning they fall foul of guidelines and laws.
4. Talent crisis – a continuing skills shortage can slow projects due to a lack of skilled workers being available.
5. Supply chain disruption – slowdowns, delays and a lack of supply chain planning can be fatal for complex data centre builds.
6. Health and safety – with a greater emphasis on health and safety, operators must ensure they are adhering to the highest standards.

Overcoming the operational inertia caused by these roadblocks isn’t impossible and will require data centre operators to take a more holistic approach to data centre design and operation. But to do this, operators will need much greater support in helping manage growing workloads and expand to emerging markets.