As Europeans scramble to stay cool during a record heatwave, Big Tech companies are facing a unique battle to keep the powerful chips in their AI data centers running.
This week’s temperatures have highlighted the impact weather can have on infrastructure such as factories, nuclear power plants and data centers. The extra demand from air conditioning units can overload the power grid and cause power outages that disrupt infrastructure. And it’s not just Europe.
For the past three years, bad weather has been the main cause of losses. zurichRisk Portfolio of US Data Center Builders. Patrick McBride, Zurich’s head of international construction, told CNBC that this now accounts for a third of the company’s losses.
Bad weather is no longer something that can be treated as a background exposure.
Patrick McBride
Zurich International Construction Manager
He said many data centers have moved to suburban or rural areas where land is cheaper and where there is little development and records of extreme weather events are often limited. “We currently have $3 billion worth of assets and more than a mile’s worth of exposure to these events.”
Why insurance companies are paying attention to climate risk
A recent study by climate risk analysis firm First Street found that 79% of the world’s data center capacity faces increased risk from severe climate disasters such as floods, windstorms, and wildfires, which can disrupt operations, increase downtime, and increase insurance and repair costs.
“It’s not a question of whether climate risk will impact the digital infrastructure revolution,” said Joe Macejac, U.S. Real Estate Digital Infrastructure Leader. swamp riskhe told CNBC. “Rather, it is about how clients and stakeholders in the digital infrastructure industry identify, quantify and manage these climate risks within their own tolerances.”
Without managing these risks, businesses could face higher costs and operational shortfalls, “posing a threat to the capital stack that powers the AI-driven data center revolution,” Macejac added.
Where new data centers face severe weather risks
Zurich’s McBride said 64% of the data center capacity being built this year is outside of traditional hubs such as Northern Virginia and moving into so-called frontier markets such as West Texas, Tennessee, Wisconsin and Ohio. He added that facilities in these areas could be at increased risk of “tornadoes, hail, and strong winds wreaking havoc on extensive rooftops that expose HVAC systems, cooling towers, solar power, and other energy facilities.”
McBride cited Brazil as an example of an emerging data center market that could face thermal issues. Meanwhile, in Europe, data centers are moving to areas such as the Iberian Peninsula, where temperatures are also rising.
“Severe weather is no longer something that can be treated as background exposure,” McBride said. “That’s one of the first things we and the owners we work with look at.”
Data centers aren’t the only things that can be affected by extreme heat.
“Heat waves simultaneously stress data centers and the power grids they depend on,” said Mishal Thadani, co-founder and CEO of AI software platform Rhizome. The company uses models to help utilities identify vulnerabilities from climate threats.
Even at normal temperatures, cooling accounts for about 40% of a data center’s energy use, Thadani said, and this energy use increases in hot weather, just as air conditioning puts more demand on the power grid. “Data centers require the most energy at a time when the grid can provide the least.”
He cited the example of the Italian city of Turin, which recorded a maximum temperature of around 38 degrees Celsius (100 degrees Fahrenheit) in May. The heat wave has put the city’s underground cables under heat stress, leading to repeated power outages, Sadani said.
“Now let’s add facilities that each power the equivalent of 100,000 homes. Heat and load hit the same wires at the same time. Data center loads can be reduced during the worst hours, but most planning models still don’t take into account how often extreme heat will come,” Sadani added.
How carriers are adapting their data center designs
microsoftOne hyperscaler leading the way in data center expansion told CNBC it is preparing for the change.
A Microsoft spokesperson told CNBC on Thursday that the company designs its data centers to “operate reliably in a wide range of environmental conditions, with site selection, redundant systems, and real-time monitoring to manage risks from extreme heat and severe weather.”
tech giant Nvidia announced last week that its new AI servers can run coolant at 45 degrees Celsius, lower than before. According to Nvidia, increasing the temperature of a cooling system by just one degree can reduce cooling energy costs by about 4%.
Aaron Lewis, the HVAC company’s chief commercial officer for global data center solutions, said these developments move technology forward for all participants in the space. johnson controls. The company has already tested its data center cooling equipment to make sure it can withstand a variety of temperatures.
Lewis said he recently saw for the first time European customers adding “climate change factors” to their specifications, so their data centers are being designed for rising temperatures.
Ultimately, the market will have “a wide variety of systems and applications. As technology continues to evolve, we find ways to transfer heat more effectively. The pace of innovation with the data center boom will allow us to operate under some of these conditions well into the future,” Lewis told CNBC.
