T5 Data Centers Provides Insight on Three Key Paradigm Shifts in the Data Center Industry

The infrastructure that supports our digital world is poised to undergo a massive transformation as AI-powered compute capacity explodes. In this sprawling landscape of data management and technological innovation, luminaries emerge for their expertise. Among these experts stands our own COO, Tom Mertz. Diana Goovaerts, Executive Editor of  Silverlinings, recently learned about Tom’s perspectives in three distinct areas of data center development and evolution. Here are the key takeaways from these articles that shed light on his insight. 

The Nuclear Option? 

The data center industry is grappling with power constraints in key markets, necessitating alternative solutions as the grid struggles to meet demand. Mertz contends that data centers eventually need to consider generating their own power, recognizing the situation’s urgency. Mertz says one potential solution lies in micro-nuclear technology, already utilized by the U.S. military, presenting a promising avenue for addressing the industry’s power needs.

According to Tom, “Long-term, the industry is going to have to figure out how to develop their own power on their own campuses. I don’t think the grid can keep up with the demand that we’re seeing.”

Read the full article here.

Small Fish in a Big Pond: Data Center Consolidation 

Building data centers entails significant costs, reaching millions of dollars per megawatt. Companies have two primary avenues to access the required capital: engaging in mergers and acquisitions (M&A) or seeking investments from private equity firms. The latter option is already gaining traction within the market as a viable means of securing funding for data center construction projects.

“You’re likely to see a consolidation in the industry because there will be a lot of smaller players that won’t be able to keep up with the demand from a capital perspective,” is Tom’s take on consolidation. 

Read the full article here.

Labor Shortage Plagues the Data Center Market

Executives in the data center development sector highlight a scarcity of skilled labor for projects, particularly emphasizing the demand for mechanical and electrical expertise. This shortage poses a significant challenge for builders, who may face heightened pressure in the coming year as extensive expansion initiatives are set in motion. Everyone is looking at ways to ensure a large funnel of candidates to fuel human resources capital. 

“I know what a challenge it is for us to keep up with the growth and how challenging it has been to find qualified people to work in these facilities. That’s only going to get exponentially worse as time goes on,” acknowledges Tom.

Read the full article here.

As AI technology rapidly evolves, infrastructure demands and complexity will continue increasing. Companies that can serve end-to-end infrastructure needs flexibly and efficiently are best positioned to enable the coming waves of AI innovation.

Read our AI whitepaper to discover how T5 can help you achieve success in today’s AI era.