Revolutionising connectivity: the trends redefining data centres in 2024

There’s no denying that 2023 was the year of generative artificial intelligence (AI): research from YouGov last year found that 90% of Australian office workers are already using artificial intelligence in daily work tasks. This was felt in the data centre world just as much as in office environments as we began to face the challenges of adapting to the demands of this technology while strategically capitalising on its vast potential.

A couple of months into 2024, it has become apparent that this will continue to be a significant trend for the data centre industry for the year ahead. Particularly around the intricate tasks of addressing security concerns and navigating the power dynamics associated with the AI revolution.

However, it’s not all about AI. Three other noteworthy trends are already gaining momentum this year, including exploration of alternative energy sources, adoption of liquid cooling solutions, and rapid advancements in quantum computing.

AI continues to integrate into the modern-day data centre

Enterprises are continuing to adopt cloud computing, adjusting their deployments and immersing themselves in digital transformation. However, AI will continue to be the leading driver of data centre demand over the next year. For every new standard data centre, we are projecting there are going to be three additional AI data centres, with all of AI’s attendant challenges, such as higher server densities.

Yet the transformative influence of AI on the data centre industry extends beyond this. At Schneider Electric, we have predicted that AI will enable operators to better manage their assets. Just as software has been automating operations, this year we’ll see AI-driven tools that can provide greater intelligence to utility and backup power control, cooling control, cross-domain operational optimisation (digital twins), data centre design and construction, maintenance, robotics and more.

Scarcity challenges and the rise of modularity

There is currently a major challenge when it comes to immediate capacity expansion. Build-to-spec data centre properties aren’t readily available. There is currently too much demand, yet low vacancy. As we look forward, we are leaning heavily as an industry towards build-to-suit solutions. This applies across the board, not only to the internet giants.

However, even purpose-built facilities face the hurdle of securing necessary components within the existing constraints. In response to this, we are seeing operators strategically locking down as much of the supply chain as possible. Modular data centre infrastructure is a very viable answer to this current challenge. Current economics support the efficiency of modularity and put a premium on guaranteed future deliveries.

Contribution to sustainable power generation

Powering new and existing data centres while aiming for carbon neutrality is a challenge that demands innovative solutions and a shift in perspective. Getting approved for a permit requires a supply of renewable energy and an understanding that your backup system could effectively turn you into a power generation plant. Not every jurisdiction is comfortable with that idea, but this year we will see the industry begin turning that into a positive narrative, embracing the idea of data centres contributing to sustainable power generation.

Large battery storage systems powered by renewables can benefit the regional grid and local population. The idea is in addition to using stored excess capacity during times of excess customer demand. Operators can also collaborate with utilities and sell power during periods of heightened demand from their customers. Precisely how to power those batteries is an open question but given a less stable power grid, the industry will likely have growing opportunities to become a community friend.

A switch to greener energy, liquid cooling and quantum computing

The remaining three trends, while still emerging, still warrant attention. The first surrounds green diesel and hydrogen.

Reduced hydropower and slower-than-expected wind and solar deployments led to power instability last year. Diesel is the quick answer for data centre operators in such circumstances, but that goes against sustainability commitments. Green (renewable) diesel and green hydrogen are options. Limited feedstocks for the former and an energy-intensive lifecycle for the latter make them suboptimal currently, but that could change. This is a problem the industry wants to solve, sooner rather than later.

A constant load of AI runs servers hot, which is why the transition from air to liquid cooling is another area of focus this year. Liquid cooling is far from having reached the ‘plateau of productivity’, but is an answer for AI clusters that exceed 20 kW per rack. The best approach is working it into new designs, which puts it a few years away from deployment. Retrofitting is tricky and a little risky, but the heat is real, and we’ll see more trialling and testing in 2024.

Finally, while it isn’t likely that quantum will move out of the very low-temperature, purpose-built lab and into a typical data centre, it’s not too early to think about protecting infrastructure from quantum computers being able to compromise existing cybersecurity. This year we’ll hear more from companies about integrating secure elements into servers and software, using NIST-selected quantum-resistant algorithms. Listen to them. Adversaries are harvesting now and planning to decrypt later.

The way forward

The rush of generative AI has hit the IT ecosystem hard. With the coincident arrival of fears and some regulatory blowback, we’re in a bit of a hangover period. Anticipating steep growth, the data centre industry is facing related economic, supply chain and powering opportunities and challenges — along with a few others that are no less important, if not quite as urgent.

It’s a good time to be clear-eyed. The industry needs to come together to gain clarity and find a path forward in the face of the AI avalanche, data centre shortages, grid challenges and more.

Joe Craparotta is a 30-year veteran of the IT industry who has been fortunate enough to have experience in many of the technological convergence shifts seen in the industry to date. Joe has been a member of Schneider Electric’s Pacific executive team for the past 10 years, taking on key leadership roles including vice president for the energy business prior to his current role as vice president for the IT business.

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