As Europeans struggle to stay cool amid a record-breaking heat wave, Big Tech faces its own battle to keep the powerful chips in AI data centers running.
Temperatures this week underscored the impact climate can have on infrastructure such as factories, nuclear power plants and data centers. Additional demand from wind units can overload power grids, causing blackouts that can disrupt infrastructure. And it’s not just in Europe.
In the last three years, bad weather has been the leading cause of loss of ZurichRisk portfolio of US data center builders. It is now running a third of the company’s losses, Zurich’s Head of International Construction Patrick McBride, told CNBC.
Bad weather is no longer something that can be treated as an afterthought.
Patrick McBride
Head of International Construction in Zurich
Many data centers move to urban or rural areas where land is cheap and records of severe weather are often limited because many areas are undeveloped, he said. “We now have $3 billion worth of assets that have been exposed to these events for over a mile.”
Why insurers are looking at climate risk
A recent study by climate risk analysis firm First Street found that 79% of global data center capacity faces elevated risks from extreme weather hazards such as floods, high winds, and wildfires that can disrupt operations, increase downtime and drive insurance and maintenance costs.
“It’s not a matter of ‘if’ climate risk will impact the evolution of digital infrastructure,” said Joe Macejak, US digital infrastructure leader. Marsh Risk, he told CNBC. “But rather how clients and stakeholders in the digital infrastructure industry identify, measure, and manage these climate risks with their tolerance.”
If they don’t manage these risks, businesses may face higher costs and operational shortfalls — “putting at risk the big stacks fueling the AI-driven data center revolution,” Macejak added.
When new data centers face severe weather hazards
This year, 64% of data center capacity under construction is outside of traditional areas such as Northern Virginia and is moving to so-called frontier markets, such as West Texas, Tennessee, Wisconsin and Ohio, said Zurich’s McBride. He added that facilities in these areas could face a greater risk of “hurricanes, hail and strong winds that cause damage to large roofs that expose the HVAC. [heating and cooling systems]cooling towers and solar energy installations.”
McBride offered Brazil as an example of an emerging data center market that may face heat challenges. Meanwhile, in Europe, data centers are moving to places like the Iberian Peninsula, where temperatures are also rising.
“Severe weather is no longer an afterthought,” McBride said. “It’s one of the first things that we and the owners we work with look at.”
It’s not just the data center that can be affected by overheating.
“Extreme heat stresses data centers and the grid they rely on at the same time,” said Mishal Thadani, CEO and founder of AI software platform Rhizome. The company uses models to help utilities identify risks from climate threats.
Cooling makes up about 40% of data centers’ energy use even at normal temperatures, and this increases when it’s too hot, just as the weather increases demand on the power grid, Thadani said. “Data centers need more power when the grid has less available to provide.”
He gave the example of the Italian city of Turin which saw a temperature of almost 38 degrees Celsius (100 degrees Fahreheinheit) in May. The heat has put underground cables under thermal stress, and caused frequent power outages, Thadani said.
“Now add centers that each one draws as much energy as a hundred thousand houses. Heat and load hit the same wires at the same time. The load of the data center can be reduced during the worst hours, but many planning models do not calculate how much the greatest heat comes,” added Thadani.
How operators adjust data center design
Microsoftone of the hyperscalers leading data center construction, told CNBC that it is preparing to change conditions.
Microsoft designs its data centers to operate “reliably in many environmental conditions, with site selection, redundant systems, and real-time monitoring to help manage the risks of extreme heat and extreme weather,” a spokesperson told CNBC on Thursday.
A technology giant Nvidia last week it said its new AI servers can run their cooling fluid at 45 degrees Celsius, up from previously low temperatures. Increasing the coolant temperature by just one degree can reduce cooling energy costs by about 4%, Nvidia says.
These changes drive technology forward for all stakeholders in the industry, said Aaron Lewis, commercial director of data solutions at the HVAC company. Johnson Controls. Company already tests data center cooling equipment to ensure it can withstand varying temperatures.
Lewis said that recently, for the first time, he saw a client in Europe add a “climate change factor” to the specification, so their data centers are designed for temperature increases.
Ultimately, the market will end up with “a diverse set of systems and applications, and as technology continues to evolve, we find ways to transfer heat more efficiently. The pace of innovation driven by the data boom will allow us to operate in some of these remote conditions in the future,” Lewis told CNBC.
