Andrew Schaap is CEO and Board Member of Aligned Data Centers.
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For anyone who doesn’t live under a rock, Nvidia’s rise is impossible to ignore. Media platforms are awash with news of the tech firm’s phenomenal growth, which is driven by huge demand for its high-powered AI chips. Nvidia, whose graphics processing units (GPUs) underpin many AI applications, recently became the world’s third most valuable company.
For data center providers—which provide the digital backbone for AI and the rest of today’s economy—it’s an exciting time. But let’s not kid ourselves. AI chips come with a big environmental price tag, thanks to their prodigious thirst for power and water.
As a result, it might seem like the buzz around AI has pushed sustainability concerns to the back burner. That’s simply not true. For my industry, operating sustainably is more important than ever—and will only become increasingly urgent in the years ahead.
Just look at the numbers. In the U.S. alone, energy consumption by data centers could reach 35 gigawatts by 2030. That’s enough to power some 26 million homes. By 2027, AI servers worldwide could use as much energy as Argentina, the Netherlands or Sweden, according to another forecast.
As an industry, we should be under no illusions about the environmental costs of meeting that unprecedented demand. That’s why companies like mine must stay focused on sustainability, or consider picking up the torch for the first time.
Although we’ve made progress, there’s still plenty of work to do. Those data center providers that manage to strike the right balance between business growth and sustainable innovation will find themselves rewarded—by customers, investors and the public.
A Brief History Of Sustainability And Data Centers
The data center industry is no newcomer to sustainability.
For starters, we’ve long had metrics for tracking energy and water consumption. Power usage effectiveness (PUE), which measures a data center’s energy footprint, was introduced back in 2006. Water usage effectiveness (WUE) followed in 2011. These metrics encourage data centers to use resources more efficiently, but they’re also an opportunity to save money.
For providers that have made innovation a North Star, reducing energy and water use are just two paths to more sustainable data centers.
Next to operations, lower-carbon construction is where the industry can make the biggest gains. In addition to using locally sourced and recycled materials for our facilities, we and other providers are prefabricating components. The latter plays a key role in reducing indirect carbon emissions—for example, by saving an electrician a trip to the building site.
We’re also seeing more examples of financing tethered to sustainable outcomes. In fact, my company was the first in the industry to obtain sustainability-linked financing and to do green data center securitization, tying both to our ESG goals and certain KPIs. Among them is a commitment to match 100% of our annual power consumption to zero-carbon renewable energy by 2024. We made good on that pledge long before.
Encouragingly, data center providers and customers are embracing renewable energy in a big way. Their use of wind and solar power in the U.S. now tops 40 gigawatts, or two-thirds of the corporate renewables market. A small group of data center operators and customers account for more than half of that market worldwide.
Innovative technologies play a major role, too. One is liquid cooling systems, currently the most efficient way to remove heat from AI chips and other high-density computing equipment. As an alternative to the air-driven units that have dominated the industry so far, liquid cooling is more reliable because it has fewer moving parts. It also uses less energy—and less water, thanks to closed-loop systems that avoid evaporation into the atmosphere.
How Everyone Wins When Data Centers Are More Sustainable
Of course, I’d never want to overstate the payoff from such efforts. Someone recently asked me what grade I’d give the data center industry for sustainability. Tough question. Let’s just say it hasn’t yet earned an A.
But I join this conversation as the CEO of a data center company that’s made sustainability a core plank of our identity. Our sustainability efforts are rooted in wanting to be a good neighbor and to do the right thing for employees, customers, communities and shareholders.
That said, there’s absolutely a business case for making data centers more sustainable. To meet the growing demand from AI companies and other players, providers that find creative ways to reduce their environmental footprint will have a competitive advantage. Besides saving money, they’ll attract customers and investors with the same green goals.
Consumers also care deeply about sustainability. Worldwide, two-thirds of them are highly concerned with the issue. Increasingly, consumers will hold businesses and investors to account for their environmental stewardship—or lack thereof.
At the same time, there are exciting opportunities to innovate as our industry seeks a more sustainable path. Because AI chips need so much energy to run and stay cool, the technological breakthrough that reduces their power consumption will have a multiplier effect. If we can shrink energy use by even 10%, that’s an enormous savings.
Ultimately, keeping sustainability front and center is a win-win-win—for data center providers, the businesses they serve and the environment. My industry may not have all the answers, but together, we can get to a better place.
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