What's the big deal about AI data centres?

"It's such a big number that it's hard to imagine. Worldwide, around $3tn (2.2tn) will be spent on data centres that support AI between now and 2029. That estimate comes from the investment bank Morgan Stanley, which adds that roughly half of that sum will go on construction costs, and half on the pricey hardware supporting the AI revolution. To put that number into perspective, that's roughly what the entire French economy was worth in 2024."

"Most AI models rely on expensive computer chips from Nvidia to process tasks. Nvidia chips come in large cabinets costing around $4m each. And these cabinets hold the key to why AI data centres are different. The Large Language Models (LLMs) that train up AI software have to break language into every possible tiny element of meaning. That is only possible with a network of computers working in unison and in extremely close proximity."

Morgan Stanley projects about $3 trillion of investment in AI-supporting data centres globally through 2029, split roughly evenly between construction and hardware costs. The UK expects around 100 additional data centres and has attracted major investments such as Microsoft's $30 billion commitment. Data centres have expanded into hyperscale operations requiring tens of megawatts and moving toward gigawatt levels. Most AI workloads depend on costly Nvidia chips housed in million-dollar cabinets. Large language models require many processors operating in extreme proximity because each metre of separation adds a nanosecond of latency, driving design and placement decisions.

Read at www.bbc.com