By: Fredrik Jansson, Chief Strategy and Marketing & Communications Officer at atNorth
As the trend for business digitalisation increases, many companies are adjusting their business models and increasingly leaning on AI to automate and optimise key processes that can increase productivity and operational efficiencies.
The technology is already proving invaluable in heavily data driven industries such as research and development or banking. The power of AI, now allows engineers to simulate a new vehicle in a matter of hours or can review MRI scans in a fraction of the time of a doctor – just two examples of a myriad of applications that AI can support. The results are amazing, but what is the cost.
Whilst continued digitalisation and the rise of AI has the power to fuel incredible innovation that has the potential to improve business decision-making, product development, customer services and risk management, the stark reality is that it also poses a real threat to our planet.
AI vs Sustainability
The colossal amount of energy required to fuel the digital infrastructure necessary to cope with the rise in AI technology is at odds with any ESG and related sustainability targets a business might have. AI uses such large amounts of electricity due to both the sheer volume of data to be processed and to power and cool the associated computer equipment. For example, a ChatGPT query needs nearly 10 times as much electricity to process than a Google search. If these operations are powered by energy with high CO2 emissions, ESG targets will not be met.
At the same time, the introduction of ESG legislation such as CSRD and the Energy Efficiency Directive in the EU requires mandatory carbon footprint and data center Power Usage Effectiveness (PUE) disclosures which could affect client and investor decision making. Indeed, a report from Goldman Sachs estimates that the data center power demand will grow by 160% by 2030, leading to an associated ‘social cost’ of data center carbon emissions of $125-140 billion.
Yet, with the increasing pressure on companies to safeguard long term profitability and with the global AI market expected to be worth $407 billion by 2027, it is clear that digitalisation is not going to stop.
It would seem that business leaders have an almost impossible task to address both these very different but interrelated issues.
The Power Problem
The enormous increase in digitalisation and AI use has in turn fueled a thriving data center industry. A report from Savills Data Centre Advisory EMEA found that there were more than 1,240 data centers in Europe, totaling 8.3 million square meters of space and approximately 8,300 MW of power capacity. These data centers are projected to account for 3.2 percent of electricity demand across the EU by 2030, at a time when energy prices are sky high and the whole of the region faces an energy crisis.
In fact, in some regions it isn’t possible to build the data center capacity required to meet the needs of the increased demand for AI and other high performance computing because the energy infrastructure isn’t in place – local grid connections simply cannot cope.
Yet it is possible to find a solution that delivers future proof digital infrastructure and truly meets sustainability and ESG credentials and this is where the location of your data becomes a crucial factor — data processing and training AI models, for example, at sites that rely on fossil fuels will have a much greater carbon footprint than those using renewable energy.
Location, location, location
The Nordic region for example, is emerging as a superior place to house today’s enterprise data. This is due to several factors – from the region’s abundant access to low cost, renewable power resources to its support of sustainability initiatives like data center heat recovery.
The Nordics benefit from a cool and consistent climate which in itself allows for more energy efficient cooling of digital infrastructure. This coupled with the region’s surplus of renewable energy, means that modern data centers in these countries are incredibly energy efficient.
Moving IT workloads to data centers in the Nordics essentially allows customers to utilise the infrastructure as a decarbonisation platform, helping businesses to meet their carbon reduction and ESG goals. For example, Shearwater Geoservices moved a portion of its global digital infrastructure to one of atNorth’s data centers in Iceland, resulting in a 92% reduction in CO2 output and an 85% reduction in cost.
As AI and ESG continue to compete for boardroom attention, organizations must consider the holistic impact of their technology. By considering how closely your tech aligns to your company values and ESG policy, and taking steps to future proof technology in a sustainable way will ensure today and tomorrow’s digitalisation and innovation, while also protecting the environment for our future generations.
