How To Power The Future Economy

The data center industry experienced significant growth in 2024 – largely fueled by the rise of AI, cloud computing and IoT applications. And electricity consumption is projected to double from 2023 to 2028, growing at a CAGR of 19.5%.

While there is some correlation between these growth figures, there’s no doubting that the data center industry is responsible for part of the increased demand. Therefore, with data storage demand continuing to grow exponentially, it’s vital that the industry, in collaboration with its stakeholders, moves quickly to embrace more sustainable processes and identify power bottlenecks. This will maintain AI’s upward trajectory and the business it facilitates.

Factoring AI growth into ESG and Innovation Planning

Most are in no doubt that the growth of AI is placing considerable pressure on national ESG strategies. As a result, data centers are increasingly being expected to do more with less – provide more computing power while using less energy and shrinking their carbon footprint.

As an example, the EU’s Revised Energy Efficiency Directive 2024 requires mandatory reporting on PUE, renewable energy, waste heat, and other factors from 2024. Facilities over 1MW in size, are being asked to undertake feasibility studies on waste, heat, and energy efficiency measures and are being encouraged to deploy best energy practices. Meanwhile in the US, data centers over 1,000 square feet are asked to report PUE and those with a PUE over 1.5 must reduce it by 10% per year until it is below 1.5.

At the same time, data center operators are being required by clients to accommodate ever-larger deployments, often with more advanced and power-hungry chipsets. 

To address this, the industry must not only create more stringently power-efficient facilities, but also adopt cleaner methods of energy consumption and production. They must work within resilient, diversified power grids that can deliver clean energy, as well as adopt innovative cooling and control technologies that consume less power.

Modern data centers use about 40% of their energy for cooling. While traditional air cooling relies on AC units and airflow management, innovative liquid cooling techniques, such as direct-to-chip and immersion, efficiently absorb and transfer heat, making them ideal for hyperscalers who are looking to increase rack density, reduce energy use, lower carbon footprints, and meet sustainability goals.

Maintaining performance

That said, reducing energy consumption must form part of a more holistic sustainability narrative. As important as environmental sustainability is to the industry – and to regulators – business sustainability is essential as well. The main challenge to improving power consumption in the data center is the need to maintain high service reliability and availability.

This is a challenge that cannot be addressed without deep partnership between all stakeholders. The data center industry and regulators will need to work together to create measurable goals, support initiatives, and track progress toward objectives. The industry and regulators must work with utilities providers to ensure an acceptable clean energy mix. And clients – in our case the hyperscalers – also need to be part of the conversation, to see where efficiencies in housing the end technologies can be driven.

Energy and power are essential to AI’s future

Mission-critical to AI deployments remains the availability of adequate energy sources. With differing national grid capacities around the world, building an AI campus may require a decision at the national level and in developing countries could mean choosing between electrifying communities or powering AI clusters. Again, these national-level decisions need input from a variety of stakeholders.

Getting this balance right will pay dividends. We’ve seen successful AI deployments happening with the right conditions, where both energy abundance and favorable political alignments are creating AI hubs. The GCC region, for example, is uniquely positioned for AI growth due to energy wealth, strong ties to the West, geopolitical stability and strategic competitiveness in digital infrastructure.

The UAE stands out as a global exemplar of this approach. In 2017, it became the first country to appoint a Minister of State for Artificial Intelligence, a move that demonstrated intent and helped accelerate AI integration across sectors. Since then, the establishment of the UAE Council for Artificial Intelligence has further institutionalized its AI ambitions, aligning policy, infrastructure, and industry to foster sustainable growth. This forward-leaning governance model reflects exactly the kind of national leadership required to responsibly scale AI capabilities, particularly in energy-rich and digitally connected regions.

As a new generation of AI-based solutions trigger exponential growth in the digital economy, data center efficiency and sustainability is transcending companies, geographies, and workloads – and becoming an undeniable business imperative across nearly every industry. To sustain AI’s growth, we must work together to create the favourable conditions in which AI hubs, powered by top data centers, can thrive.