The law firm found that 98% of 176 surveyed investors and operators admitted concerns that the increasing number of global data centres are impacting the availability and reliability of power supplies, with half of respondents identifying these issues as barriers to investment.
However, the survey suggested that operators are executing scrutiny and due diligence to increase over the next two years concerning data centre energy and water usage, with respondents actively prepared to fund their own grid connections.
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Alanna Hasek, a partner at DLA Piper said: “The energy transition has led to an unprecedented increase in demand for grid access with data centres competing with the likes of renewable energy projects and electric car charging stations.
“Faced with demands from governments to prioritise the transition, already overstretched utility companies in the US are increasingly requiring data centre investors to fund their own grid connections. Investors and developers should be prepared to see this trend begin to be replicated across other markets.”
TMT Finance, which carried out the research for DLA Piper, suggested the global data centre market is expected to be valued at around $300 billion in 2024, with a projected average compound annual growth rate of around 10% over the next five years, with the market expected to be valued at $483 billion by 2029.
The increased interest in data centres stems from investors and operators looking to capitalise on the increased demand for AI and cloud services.
DLA Piper’s research found that almost all of its respondents expected AI to drive demand for data centres, primarily through machine learning and natural language processing uses like model training and running inference.
“Data centre capacity is key to the AI revolution and the wider global economy,” said Anthony Day, a partner at DLA Piper. “To satisfy increasing demands for processing power, not only will significant investment be required from across the industry, but also a clear framework established to encourage coordination between policymakers, investors and power providers, that ensures the heightened future power demands can be met.
“It should be possible to fulfil industry needs and realise AI's potential, however, the need for sufficient and reliable power supplies to be in place must be a global priority.”
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