How to calculate total cost of ownership in the era of AI

23rd May 2024

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As the data centre industry navigates the transition to net-zero, understanding a data centre’s true environmental impact – and what that means for Total Cost of Ownership (TCO) – are crucial. In this blog, Pieter Schaap explains what data centre operators need to know about TCO.  


The rise of artificial intelligence (AI) has brought many changes in the way data centres operate. As AI continues to drive an unstoppable demand for capacity, its impact on the Total Cost of Ownership (TCO) of data centres, and their sustainability practices, has become a hot topic of conversation. AI not only increases the demand for data centre resources but also presents opportunities to optimise efficiency and sustainability. 


The impacts of AI on TCO (Total Cost of Ownership)  

There’s no doubt that Artificial intelligence (AI) is significantly affecting data centre TCO across all lifecycle stages. As AI becomes more prevalent, the demand for data centre resources increases, challenging existing infrastructure. This increased demand must be balanced with sustainability efforts, a difficult task given the high resource consumption associated with AI. 


Sustainable interactions in the AI ecosystem 

One of the primary concerns is how to maintain sustainability while meeting AI-driven demands. AI offers opportunities to optimise resource usage, if there’s enough time to plan. For example, data centres need not be high-density or located in high-demand areas. Instead, they can be established in remote locations with plentiful access to clean and green power, such as those running on hydropower in Europe. 


TCO calculations and industry metrics in the AI era 

At the moment, TCO is predominantly power-centric, so managing energy consumption needs to be a priority. Right now, the industry lacks clear metrics on what can be classed as efficient and sustainable operations – something that urgently needs to be addressed. For now, the focus should be on enhancing power efficiency and ensuring biodiversity and land use considerations are met. 


Speed to market, power, and efficiency 

The exponential growth in AI demand has created a huge headache for developers looking to achieve speed to market in the face of power constraints and efficiency. However, one benefit of developing for AI is that developers can think strategically, exploring new locations, away from the traditional, overburdened, hotspots. Exploring new locations with easier access to clean energy has great potential. However, there is still a need for clear regulations and guidelines set by national governments to navigate this transition effectively. 


Sustainable locations and technologies 

As well as providing access to renewable energy sources, building data centres in remote locations can relieve the pressure on urban infrastructure. Hyperscale providers are now moving with pace in this space, however many smaller providers struggle to adapt due to the lack of clear standards. 


Biodiversity and environmental impact 

Data centres’ environmental impact extends beyond energy consumption to include biodiversity and land use. The industry’s shift towards more cohesive and environmentally conscious practices is essential, although current metrics for measuring success are not good enough. 


Industry collaboration and knowledge sharing 

In order for the industry to move forward in this space, collaboration is key. By sharing knowledge and best practices, stakeholders can collectively address the challenges posed by AI integration and move to reduce TCO. Transparency and cooperation are key to driving more sustainable innovations and improving overall efficiency. 


Moving Forward: Embracing new technologies and practices 

To progress, the industry needs to embrace new technologies and practices that enhance sustainability and efficiency. This includes leveraging digital twins and other advanced tools to improve planning and operational effectiveness. As the industry evolves, a more ongoing and transactional approach to planning permits and environmental impact assessments is necessary. Balancing high demand with sustainability requires strategic planning, innovative technologies, and robust collaboration. By addressing these issues collectively, the industry can pave the way for a more sustainable and efficient future in the era of AI. 


DCD Webinar: How to calculate total cost of ownership in the era of AI 

Interested in learning more about this topic? Pieter recently joined industry experts from Oracle, DataCenterDynamics and Interact to explore the impact of TCO on the industry.  

Watch the webinar on demand here:  


About Soben 

Soben offers something different: world-class construction consultancy, paired with hands-on commercial experience. We increase certainty in our clients’ investments through cost, schedule, risk, and project management. With a track record of successfully delivering major construction projects, we pride ourselves on going the extra mile. And we always deliver on our promises. 

We are working with the global leaders in hyperscale and colocation data centre development on some of the world’s largest, most complex schemes. 

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