Data centers to run out of power in two years, says DigitalBridge CEO

It’s no secret that data centers – including those running new AI programs – consume lots and lots of electricity. But according to the CEO of digital infrastructure company DigitalBridge, the situation is much more dire than most in the industry believe.

“Power is really the constraining factor. And that’s going to become more evident to you and to the rest of the investor community over the next two years,” said Marc Ganzi, CEO of DigitalBridge, a company that builds data centers as well as small cells, cell towers, fiber networks and other such infrastructure. Ganzi was speaking during DigitalBridge’s recent quarterly conference call, according to Seeking Alpha.

Continued Ganzi: “We started talking about this over two years ago at the Berlin Infrastructure Conference when I told the investor world, we’re running out of power in five years. Well, I was wrong about that. We’re kind of running out of power in the next 18 to 24 months.”

Of course, Ganzi isn’t the only one sounding the alarm. “Amid explosive demand, America is running out of power,” reads the Washington Post. “A.I. Frenzy Complicates Efforts to Keep Power-Hungry Data Sites Green,” reads the New York Times.

Questing for power

“The problem has been known for a very long time,” Denise Lee, VP of Cisco’s sustainability engineering office, told Light Reading in a recent interview.

But Lee said that, now, two major trends are getting ready to crash into each other: Cutting-edge AI is supercharging demand for power-hungry data center processing, while slow-moving power utilities are struggling to keep up with demand amid outdated technologies and voluminous regulations.

According to the financial analysts at TD Cowen, the situation is becoming acute.

“Our checks indicate that the minimum lead time to get data center power in most major US markets is +3 years,” they wrote in a February report.

Specifically, they wrote that it can take up to two-and-a-half years in Dallas to obtain permits for the power necessary to run a new data center. In Atlanta that’s up to six years. And in Silicon Valley, it can take up to seven years.

But it’s even worse in Europe, the TD Cowen analysts warned. Lead times are now up to eight years in top markets like Frankfurt, London, Amsterdam, Paris and Dublin.

“This represents an incremental elongation vs. lead times seen a few months ago, a trend which we expect to continue,” the TD Cowen analysts wrote.

AI demand

A new report from the International Energy Agency (IEA) found that the 460 terawatt-hours (TWh) consumed by data centers in 2022 represented 2% of all global electricity usage. Much of that was driven by computing and cooling functions within data centers.

To read the complete article, visit Light Reading.