Power, not latency, to guide computing at the edge

Data-center operators are starting to shift their new construction projects out of hotspots like Santa Clara, California, and Ashburn, Virginia, but they’re not doing it to chase edge computing opportunities. Instead, they’re looking for locations close to available sources of power.

“There has been a surge in interest in secondary and new markets, to skirt some of the power challenges facing major markets, especially for latency-insensitive workloads, like AI training,” wrote the financial analysts at MoffettNathanson in their takeaways from a recent investor conference in New York City.

Data-center operators like DigitalBridge are looking to build new data centers in locations where the local utility can quickly provide the massive amounts of electricity needed for cloud computing, including AI operations, according to DigitalBridge CEO Marc Ganzi.

“There’s this whole next generation of cloud workloads that are showing up … but they’re not traditionally in Virginia, they’re not traditionally in Santa Clara. And you see that the customers are navigating to different places,” Ganzi said during DigitalBridge’s recent quarterly conference call, according to Seeking Alpha.

As Light Reading has previously reported, it can take up to two-and-a-half years for data-center operators in Dallas to obtain permits for the power necessary to operate a new data center. In Atlanta that can stretch to six years and in Silicon Valley, seven. That’s because data centers, electric cars, bitcoin mining and other power draws have maxed out electricity utility power production and transmission in many locations around the country.

“The power challenge is not going away soon,” wrote the MoffettNathanson analysts, citing their conversations with officials from DigitalBridge.

Edge computing on ice

The idea that cloud computing operations will migrate out of big data-center hotspots like Dallas and Ashburn isn’t new.

During the 2020s, many observers expected edge computing demand to force the construction of smaller, mini data centers in locations all over the country. Small, unmanned data centers in smaller cities – potentially at the base of cell towers – would be the only way to provide super low-latency services to residents in such locations. Otherwise, their Internet traffic would have to travel all the way to bigger data centers in Denver or Dallas, adding precious milliseconds to services like streaming virtual reality that need to be instantaneous.

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