Energy, labor and capacity are threatened by the rise of AI, driving up data center costs, report finds!
The rise of artificial intelligence (AI) data centers is threatened by limited energy availability and supply chain capacity, according to a recent report from Turner & Townsend (T&T).
Energy is not a new issue in the industry, with 92% of respondents to a survey conducted by T&T saying that energy availability is more important than location when considering an investment. Even more important are energy consumption and productivity, which are the main concerns of 4.68% of the organizations surveyed.
Tokyo ranks first as the most expensive, followed by Singapore.
The rise of artificial intelligence (AI) data centers is threatened by limited energy availability and supply chain capacity, according to a recent report from Turner & Townsend (T&T) .92% of respondents to a survey conducted by T&T said that energy availability is more important than location when considering investments. Even more pressing are energy consumption and efficiency, which are the top concerns for 68.4% of organizations surveyed.
Tokyo tops the list as the most expensive, followed closely by Singapore.
As global demand outstrips the availability of energy, labor, and capacity, market prices are rising. The T&T survey found that 57 percent of respondents said costs had increased between 5 and 15 percent.
Tokyo was ranked the most expensive market for the second year in a row, with a price of $14.30 per watt. Labor shortages have hit data center growth in the city, and new overtime laws have put pressure on supply.
Singapore is in second place at $13.80 per watt, with energy constraints the country’s top concern. Close behind are Zurich, Silicon Valley, and New Jersey. Lagos is in sixth place, and while Nigeria doesn’t necessarily have energy or space issues, labor and material costs continue to drive up the cost of investment. In Scandinavia, the data center offering continues to look promising. However, the heavy dependence on an international supply chain and imported talent is starting to take its toll and has serious cost implications. Additionally, competition for supply chain expertise will increase as data center developers compete with new hyperscalers for resources.
The report notes that the UK will be a market to watch, with London ranked 10th, particularly following the government’s decision to classify data centers as critical national infrastructure. Lisa Duignan, head of data centres at Turner & Townsend, said: “Data centres are increasingly seen by governments as critical national infrastructure and there is clearly a huge opportunity for customers, but challenges need to be managed, particularly energy supply and labour shortages.
