Seekriti Saha
Nvidia may be the face of the artificial intelligence boom, but a lesser known of of suppliers who are manufacturers of transformers, switchgear and advanced cooling systems, is seen to be emerging as an equally significant winner in the global race of building data centres.
As hyperscalers and cloud majors are rushing for addition of computing capacity, the demand for the nonexotic hardware which keeps AI data centres powered along with cooling has risen. McKinsey Consultancy projects around $7 trillion in global market data centre investment by 2030, and Nvidia itself last week said that it expects AI-related expenses to stand firm for the coming years. Yet even with that scale of capital flowing in, the physical build-out is grappling to keep up with the pace in demand, and equipment suppliers around Asia’s production chain are the beneficiaries. Though the sharp stock market surge, many saw earlier this year have since cooled down.
Pace is becoming the industry’s biggest limitation. Hyperscale operators specially want brand new facilities ready by six months, but connections to those sites to the power grid can take around two years in emerging market sectors and extend beyond eight years in some of the developed economies. The conflict between construction timelines and grid capacity is impelling developers to look for equipment that can be stationed faster and run more smoothly.
Cooling is where the shift is most apparent. Liquid cooling, which can reduce energy consumption by more than a quarter in comparison with conventional air conditioning, is anticipated to power 70 per cent of new AI data centre installations by the year 2030, up from nearly 30 per cent today, analysts estimated. That is propelling strong order books for thermal-management specialists like Taiwan’s Delta Electronics, Asia Vital Components and Auras Technology, also Shenzhen Envicool Technology of China.
The power side of the equation is under similar strain. Bank of America estimated that power draw per AI server rack could increase to more than 1.5 megawatts by the end of the year 2030, around 100 times what a traditional data centre rack consumes currently, as Nvidia’s chip roadmap drives towards higher performance. That has grabbed attention on solid-state transformers, which use semiconductors instead of conventional copper windings and magnetic coils while converting and routing electricity more efficaciously. UBS expects technology to meaningfully ameliorate power efficiency as adoption keeps on growing.
The grappling capacity is also driving developers toward unconventional builds like floating data centres, underwater facilities and also servers housed in caves and tunnels as operators look for locations with easy access to the cooling water or land. South Korea’s HD Hyundai Electric reported the growth of on-site power generation, and floating data centres is opening upcoming opportunities for suppliers of marine medium-speed engines, which is a market it had not conventionally served.
While chipmakers dominate headlines, it is the companies solving the more humdrum troubles of electricity and heat which may prove just to be as critical to how fast and far the data centre booming market can run.
(source: reuters)