The demand for data centers is on the rise due to ongoing digitization trends and advancements in AI technology. This growth has also led to an increase in power demand, as these data centers require a significant amount of electricity to operate efficiently. According to a recent article by McKinsey, it is projected that by 2030, the power demand for data centers will be three times higher than current capacity.
This growing need for power has become a critical factor in driving new data center developments. As states and municipalities work towards balancing this increasing demand with sustainability goals, there are opportunities emerging for investors and incumbents alike.
Investors can play a crucial role in meeting the demands of generative AI and data centers by investing capital into utility companies’ efforts to expand transmission and distribution infrastructure in major markets. They can also consider investing in secondary markets or focusing on fiber build-outs, power infrastructure or even partnering with established developers.
In addition, there are investment opportunities arising from the need for new equipment supply as more advanced technologies emerge within this space. For instance, shortages of critical equipment have allowed smaller companies focused on creating generators or hyperscale-focused providers interested in developing PDUs (power distribution units)to grow significantly.
Another area where investors can make an impact is through tradespeople training programs aimed at addressing labor shortages within electrical installation services required during construction phases of these facilities.
Overall,data center growth has brought attention to gaps within existing power infrastructure systems.However,this presents unique investment prospectsfor those lookingto investinthe next generationofpower supplyanddata storage solutions.Additionally,the savvy investorcan not only generate positive returns butalso contribute towards fuelingthe advancementsof genAIwhile positioning themselves favorablywithinthis rapidly evolving industry landscape.”
