Data center

A data center is a facility used to house computer systems and associated components, such as telecommunications and storage systems. Data centers are critical infrastructure for the storage and processing of information, and they support the global financial system, cloud services, machine learning, and artificial intelligence.

Data centers vary widely in terms of size, power requirements, and overall structure. Four common categories are onsite enterprise data centers, colocation facilities, hyperscale data centers, and edge data centers. Hyperscale and colocation facilities collectively account for approximately 74% of U.S. server energy consumption as of 2023, a share that has grown significantly over the past decade as workloads have migrated away from enterprise on-premises infrastructure.

Since IT operations are crucial for business continuity, a data center generally includes redundant or backup components and infrastructure for power supply, data communication connections, environmental controls (e.g., cooling, fire suppression), and various security devices. Large data centers operate at an industrial scale, requiring significant energy. Estimated global data center electricity consumption in 2024 was around 415 terawatt hours (TWh), or about 1.5% of global electricity demand. The IEA projects that data center electricity consumption could double by 2030. The rapid growth of data center infrastructure has prompted regulatory debates in multiple jurisdictions regarding tax incentives, electricity grid impacts, water consumption, and compatibility with state and national climate commitments. High demand, driven by artificial intelligence (AI) and machine learning workloads is accelerating the deployment of high-performance servers, leading to greater power density and increased strain on electric grids.

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