Data center support increases energy efficiency

Recent developments in generative artificial intelligence, such as the launch of GPT-4 and its adoption by the public, have increased the demand for computing power in data centers. This also means increased power usage in data centers, as “computing” is an energy-intensive function. The rate of increase in the use of productive artificial intelligence is uncertain. However, De Vries (2023) performed several scenarios based on NVIDIA AI servers, as INVIDIA has a 95% market share. The 100,000 servers that NVIDIA will deliver in 2023 will consume between 5.7 and 8.9 terawatt hours of electricity, which is a lot of energy but not significant given the overall demand of the sector. Additionally, challenges in manufacturing advanced semiconductors may prevent rapid adoption. However, NVIDIA may be able to offer more AI server units in the future. According to De Vries (2023), these servers could require 134 terawatt hours of electricity annually in 2027, which is an extreme scenario. This will of course be a lot of electricity.

However, it is important to note that these calculations depend on various factors that are still uncertain, such as the ability to have profitable business models at that scale, as well as the lack of further efficiency gains (both). hardware and software). Additionally, in our base case, we already assume mid- to single-digit increases in annual server growth. Accelerated growth in artificial intelligence will outpace server growth, but our base case can account for regular AI growth.

In short, the expected growth of the data center sector is a result of the increasing digitization of our economy. However, as many companies must report the environmental footprint of their purchased services, data center environmental impact measures, as described in sustainable finance frameworks, will become more important over time. This will give the most stable data centers a competitive advantage. In this article, we discuss data centers and sustainable finance.