Data centre supply chain constraints could cripple AI growth

Image credit: Edgar Oliver/Pixabay

The shift towards digital technologies across industry and society has been rapid – if uneven – but it may soon face a dramatic slowdown – because of constraints on delivering vital computing infrastructure.

New research by construction and property management consultancy, Rider Levett Bucknall (RLB), claims that environmental regulations, supply chain shortages, and even the threat of armed conflict could impact the provision of new data centres – which underpin today’s hyper-connected, digital world.

Data centres are especially crucial for providing the high-powered computing required by the burgeoning implementation of AI applications.

The research surveyed 475 executives from data centre operators and contractors across the UK and Europe, and included qualitative interviews with Mercury Engineering, Ada Infrastructure, Mace Technology and Manufacturing, and Equinix.

Andrew Fettes-Brown, head of data centres at RLB UK and Europe, said: “Our findings reveal increasing concerns within the data centre sector over the resilience of its construction supply chain, and its ability to keep pace with the rapid growth of data and digital services.

“A third of operators we surveyed have cancelled projects due to supply chain constraints, and many contractors said they have turned down projects they deemed too risky.”

The survey found that 70% of the respondents agree that supply chain shortages and disruptions will limit digitalisation in Europe in the next five years.

Furthermore, the most likely disruptions, with the most impact to the data centre construction supply chain, are expected to be:

  • Increased environmental regulation – 60%
  • Disruptions from physical climate risk – 57%
  • Geopolitical disruption – 56%
  • Supply chain labour shortages – 49%
  • Exchange rate fluctuations – 46%
  • Armed conflict – 34%

The research shows that by 2030, 58% of data centres are predicted to be using liquid cooling, with immersion liquid cooling the most likely adopted solution.

This move to liquid cooling could help many data centre clients meet their sustainability targets, which presently only half of respondents admit to having put plans into effect.

Only four in 10 respondents have adopted on-site renewable generation to date, and fewer still presently scrutinise the environmental performance of suppliers (37%), measure and reduce the embodied carbon of material (31%) or select materials that boost energy efficiency (25%).

Furthermore, 56% of respondents agree that investors in data centre projects will lose out unless the construction supply chain is improved. This is leading to 66% of contractors and 47% of operators using contractual measures to share supply chain risk with their counter-parties.

In other findings, 42% of respondents also noted that they or their customers are more likely to choose ‘new and alternative’ destinations as a result of supply chain constraints with Italy (65%), Germany (58%) and France (54%) the most likely destinations.

But the main constraint to growth is the availability of power, with very few countries within the EU, and the UK, that are actively aligning data centre industry growth and national infrastructure development.

Constraints on electrical networks have been further compounded by a shift from energy deriving fossil fuels (such as natural gas, diesels and gasoline), and exponential increased demand on the electrical networks.

Fettes-Brown added: “The war in Ukraine and other geopolitical events have exposed vulnerabilities in supply chains, while the prices of construction materials are expected to continue to rise.

“The climate crisis is adding further pressure, with regulators setting ever-more stringent energy efficiency requirements for data centres and associated infrastructure, and extreme weather events threatening to disrupt supply chain operations.

“Our report explores solutions to these challenges and recommends a holistic approach that addresses risk proactively through collaboration and innovation.”

Image credit: Edgar Oliver/Pixabay

Read next: Northern Ireland invests £16.3m in new AI centre

Are you a building professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.

Related posts

DCW 2024: There’s no substitute for the human presence

GCCA agrees decarbonisation deal with UN body

Next government urged to do more on skills and mental health

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Read More