With the rise in data centres, their environmental footprint has remained a cause of concern. Even as data centres increase energy consumption, solutions like nuclear energy and heat recovery systems are emerging as key opportunities for long-term sustainability.
Big techs and network companies have also invested in initiatives that help reduce the energy consumption of AI data centres. Tech giants like Microsoft, Google, and Amazon have announced investments to build new data centres, and companies such as Eaton (ETN), Vertiv (VRT), and REITs such as Digital Realty (DLR) and Equinix (EQIX) are key players powering and maintaining these facilities.
openai suggests giving 20-25% of new compute to local public education “in return for incentives and regulatory ease” to build data centers pic.twitter.com/vNxqM8Fo1X
— morgan — (@morqon) October 24, 2024
Siemens, a technology company, offers tailored project financing for data centres. Furthermore, Atman, a Polish data centre operator, pledged last year to offset 100% of the energy consumed by its facilities with renewable energy.
According to research by Rhodium Group, if data centre demand triples by 2035, as expected, and developers struggle to install new wind and solar power, power sector emissions could be more than 56 per cent higher than forecast.
As per a report by Global X by Mirae Asset, a group of exchange-traded funds (ETFs), factors contributing to the growth of the data centre industry include majorly generative AI which fuels investments in data centres, smart grids, and tech infrastructure.
Support for AI Supercomputer
The funding for these AI data centres benefits the data centre and the investor directly and also reaches other sectors. For example, it promotes AI advancement and the growth of cutting-edge tech.
As previously reported by AIM in September, Yotta Data Services, an Indian AI startup, has partnered with the Government of Telangana to build a high-performance, GPU-powered AI supercomputer.
This supercomputer will be housed in a specially designed, high-density, liquid-cooled data centre campus in Hyderabad’s AI City.
“The data centre for this will reportedly source most of its power from green sources and utilise the latest environmentally responsible technologies and practices. These include using power-efficient chips, free air cooling, and liquid cooling systems to get the most Power Usage Effectiveness (PUE).”
India’s Growth Story
According to the Economic Times, India has emerged as a prominent player in the IPO market for 2024, attracting attention from international investors. The combination of a startup ecosystem and technical advancements in India is a key market for AI development.
The push for data localisation, spurred by India’s data protection norms and the proposed data centre policy, along with cost efficiency, has swayed global data majors towards the country.
Big giants like Adani, NVIDIA, Tata and Reliance are swiftly moving ahead. Older players, like the NSE-listed E2E Networks, are expanding to India as well. AI, IoT, machine learning, and now generative AI are accelerating the trend of investments in data centres in India, among other factors.
NVIDIA CEO Jensen Huang says a trillion dollars is being spent on data centers to enable the next, biggest wave of AI to revolutionize business productivity pic.twitter.com/HX290dWGIp
— 𝕏VN (@xveritasnow) October 27, 2024
“The anticipated growth of India’s data centre market, projected to increase from USD 5.45 billion in 2023 to USD 7.02 billion by 2029, serves as a testament to the escalating prominence of this sector,” as reported by AIM in February.
In an interview with the Assam Tribune on 24 October, Yotta Data Services co-founder CEO and MD Sunil Gupta said, “India’s data centre capacity will increase to 5,000 megawatts in the next seven or eight years.”
AIM also predicted in 2020 that the data centre industry in India would boom after Amazon invested $2.8 billion in building its second data centre region there.
“The need of the hour is to leverage such opportunities to derive a maximum foothold in the global space as well.”
Recent Investments
A Reddit user highlighted the growing demand for energy and equipment, stating, “The power source is always utility just like your home…Datacenters usually have their own dedicated substation that then feeds multiple redundant sources (UPS, Diesel Generators, multiple MV utility sources, etc.).”
Oracle's Larry Ellison says the race to build AI data centers "is an ongoing battle for technical supremacy" and multi-gigawatt facilities costing $100 billion and powered by nuclear reactors are being built pic.twitter.com/qn28uNfetf
— Tsarathustra (@tsarnick) September 13, 2024
On 21 October 2024, Oriole Networks, a company that uses light to train LLMs, announced raising an additional $22 million to further develop its energy consumption solutions. This funding round, led by Plural, brings their total raise this year to $35 million.
Founded in 2023 at University College London (UCL), Oriole Networks is positioned as a leader in photonics for AI infrastructure. The company uses photonic technology and aims to solve essential AI challenges like speed, latency, and sustainability.
This lets them create an AI chip network that can train LLMs up to 100 times faster while consuming less energy.
Furthermore, SoftBank Vision Fund, the Japanese tech giant that has invested $160 billion globally, is shifting its focus toward AI infrastructure and data centres in India. This move comes after investors’ interest in AI technologies over the past two years.
Earlier in May, AIM had reported that the conglomerate was considering investments in Indian data centres and industrial robotics companies as part of its strategy to capitalise on AI’s infrastructure layer.
Alex Clavel, co-CEO of SoftBank Vision Funds, highlighted that “AI in India could develop along these lines, building on the existing digital and tech infrastructure.”
According to The Information, SoftBank’s Vision Fund will invest $500 million in OpenAI. This would be its first investment in OpenAI.
As investors forge ahead with AI advancements, the focus on infrastructure and data centres is expected to play a crucial role in shaping the future of AI in India.
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