The increasing digitization and use of AI technology has led to a rise in demand for data centers. This growth, however, also means an increase in power consumption to keep these facilities running. According to a recent McKinsey article:
By 2030, the demand for power in data centers is expected to triple from its current capacity.
Access to reliable and sufficient power has become crucial for the development of new data centers.
Meeting the energy demands of generative AI and expanding data center operations will require significantly more electricity than what is currently being produced in the United States.
This presents opportunities for investors as states, municipalities, and utility companies strive towards balancing this growing need with sustainability goals. The article suggests that there are three key areas where investors can make an impact:
1) Power access and sources: Investing capital into utility companies’ efforts to expand transmission infrastructure or focusing on fiber build-outs or investing in developers could be strategic moves.
2) Power equipment: With new power grids comes a need for equipment supply which opens up opportunities for investment into emerging technologies such as generators or PDUs.
3) Tradespeople: There is currently a shortage of skilled laborers needed for electrical installation at these growing data center locations. Investors can capitalize on this by consolidating smaller contractors or reimagining talent sourcing methods.
In conclusion, while there may be gaps exposed within our current power infrastructure due to rapid growth within the industry; savvy investors have potential investment opportunities that not only generate positive returns but also fuel further advancements in gen AI technology while positioning themselves favorably within this evolving market.
