• Growth of Artificial Intelligence creates unprecedented demand for data centres

    21 February 2024

    (21 February 2024, Hong Kong) Consumers and businesses globally are expected to generate twice as much data in the next five years as all the data created over the past 10 years. This growth presents both an opportunity and a challenge for real estate investors, developers and operators, according to JLL’s (NYSE: JLL) Data Centres 2024 Global Outlook.

    With the growing demands of Artificial Intelligence (AI), data centre storage capacity is expected to grow from 10.1 zettabytes (ZB) in 2023 to 21.0 ZB in 2027, a five-year compound annual growth rate (CAGR) of 18.5%.  A zettabyte is 1,000,000,000,000,000,000,000 or 1 sextillion bytes. Not only will this growth generate a need for more data centres, but generative AI’s greater use of energy will require more energy-efficient designs and locations. The need for more power will require data centre operators to increase efficiency and work with local governments to find sustainable energy sources to support data centre needs.

    Jonathan Kinsey, EMEA Lead and Global Chair, Data Centre Solutions, JLL, said, “As the data centre industry grapples with power challenges and the urgent need for sustainable energy, strategic site selection becomes paramount in ensuring operational scalability and meeting environmental goals. In many cases, existing grid infrastructure will struggle to support the global shift to electrification and the expansion of critical digital infrastructure, making it increasingly important for real estate professionals and developers to work hand-in-hand with partners to secure adequate future power.”

    AI-specialised data centres look different than conventional facilities and may require operators to plan, design and allocate power resources based on the type of data processed or stage of generative AI development. As the amount of computing equipment installed and operated is expected to continue increasing with AI demand, heat generation will surpass current standards. The largest data centres – hyperscalers – have the greatest need for high-density infrastructure. International Data Corporation (IDC) estimates that average rack density in Asia Pacific (excluding Japan) will grow at a 7.8% CAGR in the coming years, especially in hyperscale data centres.

    Since cooling typically accounts for roughly 40% of an average data centre’s electricity use, operators are shifting from traditional air-based cooling methods to liquid cooling, which boasts significant power reductions – as high as 90% – while improving capability and space requirements.

    At the same time data centre operators are exploring alternative power sourcing strategies for onsite power generation including small modular reactors (SMRs), hydrogen fuel cells and natural gas. To support these requirements, critical changes need to be made worldwide to increase power usage.

    Andrew Green, Regional Practice Lead of Data Centres at JLL in Asia Pacific, said, “As an international trade and financial hub, Hong Kong boasts robust and advanced telecommunications infrastructure, reliable and stable power supply, abundance subsea cable connectivity, natural disaster-free environment and dedicated government policies to nurture local talents and actively attract overseas experts in the realm of information and communications technology, making it an ideal location for establishing Data Centre’s. The recent major leasing transaction at HK2, an upcoming Data Centre’s in Kwai Chung, and the new data centre developments in Fanling, Fo Tan and Tsuen Wan, are examples of the thriving Data Centre market in Hong Kong. In addition to the Feed-in Tariff Scheme and other initiatives that promote the development of renewable energy, the government unveiled in the 2023 Policy Address its plan to formulate the Strategy of Hydrogen Development in Hong Kong in the first half of 2024 and commenced the preparatory work for legislative amendments pertinent to the production, storage, transportation and application of hydrogen energy. These efforts exemplify the government’s determination to accelerate the development of hydrogen energy in the city, creating a supportive environment for Data Centre’s seeking sustainable energy solutions.”

    “The global energy conundrum presents both opportunities and challenges to commercial real estate leaders with a stake in the Data Centre sector. Generative AI will continue to fuel demand for specialised and redesigned Data Centre’s, and developers and operators who can provide sustainable computing power will reap the rewards of the data-intense digital economy,” said Green.

    Video

    The 19th edition of Eco Expo Asia was successfully held from 30 October to 2 November 2024 at AsiaWorld-Expo in Hong Kong.


    MVii AR Reality - The Henderson Iconic Office Development feat. Immersive Interactive AR Experience

     
    Gallery

    no images were found