Shortage Of Parts Impedes Building Data Sites

"The frenzy to build data centers to serve the exploding demand for artificial intelligence is causing a shortage of the parts, property and power that the sprawling warehouses of supercomputers require.

The lead time to get custom cooling systems is five times longer than a few years ago, data-center executives say. Delivery times for backup generators have gone from as little as a month to as long as two years.

A dearth of inexpensive real estate with easy access to sufficient power and data connectivity has builders scouring the globe and getting creative. New data centers are planned next to a volcano in El Salvador and inside shipping containers parked in West Texas and Africa.

Earlier this year, data-center operator Hydra Host found itself in a bind, searching for 15 megawatts of power needed to operate a planned facility with 10,000 AI chips.

The company went from Phoenix to Houston to Kansas City, Mo., to New York to North Carolina to find the right space. It is still on the hunt.

The locations that had the power didn't have the right cooling systems required to keep the servers operational. New cooling systems would take six to eight months to arrive, thanks to a supply crunch. Meanwhile, buildings that had the cooling didn't have the transformers required to receive the additional power -- those would take up to a year to arrive.

"With what we're seeing, the fervor to build is probably the greatest since the first dot-com wave," said Hydra Host Chief Executive Aaron Ginn. He said the search for the right parts and space has taken months longer than expected.43

The demand for computational power to create AI systems has surged since late 2022, when OpenAI's ChatGPT started showing the technology's potential. Demand for computer servers equipped with new generations of AI chips -- the most popular of which are graphics processing units, or GPUs, from Nvidia -- is overwhelming existing data centers.

"You had this tsunami, and there's going to be a shortage of data-center inventory," said Raul Martynek, chief executive of data-center company DataBank.

Creating and deploying complex AI systems requires unprecedented numbers of chips. Analysts estimate that training the version of ChatGPT that came out in 2022 required more than 10,000 of Nvidia's GPUs, while more-recent updates have required significantly more -- putting further strain on data centers. Large tech companies have struggled to get their hands on supplies.

The amount of data-center space in the U.S. grew 26% last year, according to real-estate firm CBRE, and a record amount was under construction. The price of available space is rising while vacancy rates are negligible -- a sign that supply isn't keeping up with demand.

Bill Vass, vice president of engineering at Amazon Web Services, said a new data center pops up somewhere in the world every three days.

It generally takes a year and a half or two years to put up a large new data facility, said Jon Lin, the general manager of data-center services at Equinix, one of the world's biggest data-center operators.

It is difficult for the industry to suddenly scale up when demand skyrockets because of the extensive planning and supply-chain management required, he said.

"These are not easy problems where you can pivot on a dime and triple capacity very quickly," said Lin.

Cloud giants like Amazon Web Services, Microsoft and Alphabet's Google are investing billions of dollars in new data centers. Google's capital expenditures -- almost half of which was on its data infrastructure -- jumped 45% from a year earlier to $11 billion in the three months through December." [1]

1. Shortage Of Parts Impedes Building Data Sites. Dotan, Tom; Fitch, Asa.  Wall Street Journal, Eastern edition; New York, N.Y.. 25 Apr 2024: B.1.