Data Center News Roundup: Crypto-Mining Energy Use Revealed, Chip Industry Back on Track

With data center news moving faster than ever, we want to make it easy for industry professionals to cut through the noise and find the most important stories of the week.

The Data Center Knowledge News Roundup brings you the latest news and developments across the data center industry – from investments and mergers to security threats and industry trends.

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Digging for Data 

In a week that saw Texas Governor Greg Abbott proclaim that the state will need to grow its power supply capacity by as much as 15% annually to keep up with surging demand, new research was released that put the soaring power consumption from cryptocurrency mining operations in stark focus. 

According to the US Energy Information Administration, annual electricity use from cryptocurrency mining could now represent more than 2% of total US electricity consumption. 

“The increased demand associated with cryptocurrency mining can present challenges to the operation of electricity grids,” the EIA said.  

cryptomininglocations

Amid the rapid growth of cryptocurrency mining activity in the US, the agency said it will be conducting a mandatory survey focused on “systematically evaluating the electricity consumption associated with cryptocurrency mining activity” across the country. 

In related news, Chinese bitcoin miners have found a new crypto haven in Ethiopia.  

The East African nation might seem like an unlikely place to set up crypto-mining operations, but cheap electricity and favorable regulations are attracting investors looking to maximize their returns in the sector. 

Back in the US, the increased demand for power has resulted in grid reliability becoming a growing concern for utilities. To bolster its supply during peak times, US power company Duke Energy this week said it was in talks with tech companies including Microsoft Corporation about tapping generators installed at their data centers. 

The potential plan would have Duke calling its data center customers when more electricity is needed and paying them to turn on large generators that serve as backup power supply.  

Chip Watch 

The global chip industry is poised for a significant rebound this year with sales expected to jump to a record level, fueled by a greater need for electrical components from a broad range of businesses, according to a forecast from the Semiconductor Industry Association (SIA).  

Worldwide sales declined 8.2% to $526.8 billion in 2023, although the fall was mitigated by improving conditions in the second half of the year, the association said this week. The increasing momentum indicates sales will gain 13% this year to almost $600 billion. 

The news came as Reuters published an exclusive report detailing how Facebook owner Meta Platforms was planning to deploy into its data centers a new version of a custom chip aimed at supporting its AI push.  

“The chip, a second generation of an in-house silicon line Meta announced last year, could help to reduce Meta’s dependence on the Nvidia chips that dominate the market and control the spiraling costs associated with running AI workloads as it races to launch AI products,” Reuters said.  

It was fitting, then, that Data Center Knowledge writer Christopher Tozzi took a closer look at whether custom silicon could give public cloud an edge over private data centers. 

“Custom silicon is fast becoming one of the key differentiators between public clouds and private data centers,” Tozzi said. “As more public cloud vendors continue to expand their custom chip selections, private data center operators could be at a disadvantage.” 

Read the full article to find out more. 

AI Regulation Guide 

AI continues to make headlines around the world, and according to Forrester, one in three global organizations identify risk and governance as barriers to generative AI adoption. These concerns are set to grow even more now that the EU AI Act is becoming a reality. 

In an effort to allay these concerns, Forrester analyst Enza Iannopollo penned a blog post outlining what business leaders need to know ahead of the Act’s implementation. 

“The ability to categorize AI systems and the use cases that they support in line with the risk-based approach of the Act is a fundamental action,” Iannopollo said. “This means that organizations must start designing their own processes to build, execute, and optimize their own approach for classifying AI systems and assessing the risks of the use cases at stake.” 

Going Up 

In development news, Blackstone is reportedly in talks to buy Winthrop Technologies, a major construction of data centers. According to Sky News, Blackstone is the frontrunner to acquire the Irish construction firm for a price “believed to be in the region of £700 million ($884 million). 

Elsewhere, Datacenter One, the Germany-based provider of colocation services acquired by AtlasEdge in February 2023, has announced the opening of a new data center in Hamburg. 

“With the opening of HAM1, Datacenter One continues its rapid success story of developing regional data centres to serve customers throughout Germany, one of Europe’s fastest growing markets for localised digital infrastructure,” the company said.  

In Southeast Asia, Bitera – an affiliate of the MMS Group Indonesia – has announced the operational readiness of its data center in Jakarta.  

The nine-story facility boasts a critical IT load of 20 MW covering more than 8,600 square meters of colocation space, accommodating up to 4,000 racks. 

The news came as reports surfaced that Telkom Indonesia was planning to sell shares in its data center business to fund the unit's local and global expansion. 

In India, meanwhile, Ishan Technologies has launched a new data center in Mumbai. The Mumbai Ishan DC-1 facility will offer “flexible colocation configurations, including single rack, split racks, caging, or any modular solution.”  

Lastly, Moveworks, a US-based AI copilot company, announced the opening of its first regional data center in Australia. This adds to the company’s recent data center expansion in Canada and the EU in 2023. 

Other Great Reads on DCK This Week 

Data Center Sustainability Predictions, Hopes, and Questions for 2024. Industry experts outline the key challenges and opportunities for data center sustainability in 2024. 

AI Is Pushing New Communications Tech Into the Data Center. Massive investment into AI operations inside data centers is generating demand for new communications technologies that sit inside those facilities. 

Microsoft, Amazon-Backed Cloud Body in Talks Over EU Dispute. CISPE said it wants to make "substantive progress" on the cloud software licensing dispute this quarter. 

AI Drives the Ethernet and InfiniBand Switch Market. AI may force enterprises to rewire parts of their data centers so they are fully optimized to run such workloads. The question is: do you use Ethernet or InfiniBand? 

Nvidia, Cisco to Help Companies Build In-House AI Computing. Tech firms team up to make it easier for organizations to build their own AI computing infrastructure.