AI boom will put pressure on the energy grid: NextDC
Australia’s largest domestic data centre operator says the artificial intelligence boom has accelerated land and energy challenges created by the shift to cloud computing over the past decade.
NextDC operates a network of 15 data centers in Australia, with four more in planning or development, part of a deal valued at $10.3 billion. Chief Customer and Commercial Officer David Dzienciol says the use of artificial intelligence is driving rapid expansion, but unstable energy prices amid global conflict and the transition to renewable energy will “without a doubt” put pressure on energy networks.
David Dzienciol, COO of NextDC, says artificial intelligence is just “the next big wave” for the data industry.
“We need to look at all alternatives together to make sure we can meet demand,” he says. The company’s CEO, Craig Scroggie, had previously stated that nuclear energy would have to be considered to enable more computing power.
Australia’s data centres use about 5 per cent of the country’s energy, or about 1050 megawatts in 2024 – similar to the entire consumption of South Australia – and will use between 8 and 15 per cent by 2030, according to a study by Morgan Stanley. The Australian Energy Council says a large data centre can use as much energy as 50,000 homes or a small town.
The industry is also facing high prices for industrial real estate in major centres. NextDC announced in 2021 that it would pay $124 million for a site currently in the planning stages in Sydney’s Horsley Park. Dzienciol says the company is seeing “workloads increasingly being moved to the edge”: It has a site in Port Hedland and another in Newman in northern Western Australia under development, and has just opened its first data centre in Darwin.
NextDC was founded in May 2010, during a decade in which data was being moved from office server rooms to remotely accessible “cloud” storage operated by data center operators.
The company announced this month that it had been certified by US technology giant Nvidia to help Australian organisations use the company’s platforms, which are based on GPU (graphics processing unit) chips that have sent investors into a frenzy and earned Nvidia a top spot among the “Magnificent Seven” of technology stocks.
Dzienciol said the raw power of GPU computing, in which hundreds or thousands of less powerful units run the same processes at high speed and in high volume, supports artificial intelligence better than traditional CPU (“central processing unit”) computing, whose more versatile, brain-like systems can switch between processes but to a lesser extent.
