Power: The Defining Challenge and Opportunity of the AI Data Centre Era

Power is now the headline constraint of the data centre industry, driven by the convergence of AI at scale and an energy infrastructure that was never designed to absorb demand of this size at this pace. We're asking grid architecture built several decades ago to accommodate an exponential technological shift, and this tension is set to define the industry’s path for the next decade and beyond as AI becomes increasingly embedded in our everyday lives.

With this, it is no surprise that power is the cornerstone of our strategy at CyrusOne. It determines where we build and underpins our ability to make credible commitments to our customers. Securing energy capacity proactively, and managing it sustainably, is what gives us the confidence to move decisively when the right opportunities emerge.

At the core of  all of this is stewardship. A power-first strategy isn't just about access to capacity; it must also ensure that power infrastructure is built and operated in a cleaner and more efficient way.

So, how is this showing up in our industry within a world that is only set to get more power intensive?

AI is Re-Shaping Data Centre Design

While traditional enterprise and cloud workloads allowed for steady, predictable expansion in the industry, AI workloads are prompting a fundamental redesign of data centre engineering. This is driving a shift toward ultra-high-density deployments, advanced liquid-cooling architectures, and increasingly bespoke environments. 

AI workloads and hyperscaler deployments are driving rack densities from 3–5 kW to over 100 kW per rack, with experimental racks exceeding 300 kW. Future efficiency gains are expected across power delivery, cooling, and workload optimisation, including data centre power at cabinet levels and thermal storage for transient loads.

Next-generation platforms like CyrusOne’s Intelliscale, designed specifically for AI, can handle these high-density compute and thermal challenges while providing the scalability and flexibility for AI-specific power and cooling needs.

Market Regulation and Opportunities to Collaborate

Lesser-known power constraints are outdated market incentives and regulatory inertia. In practice, this often translates into multi-year lead times for policy, permitting, and grid connections – slowing the pace at which new capacity can be delivered. Investment in new grid expansion projects is significant and is usually government backed, therefore there isn't a lot of incentive to undertake large speculative growth. The growth of the data centre industry is 20-30% CAGR and this can't be matched by the transmission companies’ own infrastructure investment plans.

This lack of opportunity with transmission connections gives rise to the need to build our own power generation or work with local power generators to buy energy from behind the meter. This is expensive and usually uses a carbon intensive fuel such as natural gas. Ultimately, the data centre should connect to the grid so as to provide a lower cost and lower carbon content of energy. One day the opportunity to co-locate with a small modular nuclear reactor (SMR)  would resolve this issue, but  this is still a way off particularly in the traditional data centre locations. What is more it would still require a grid connection to ensure that the excess energy from the SMR could be injected into the grid to optimise the commercial investment.

In the nearer term, collaborations with utility providers and power generators can help. Working together on interconnection solutions or substations  can accelerate delivery and bridge gaps created by the long lead times for building major new infrastructure. Greater transparency around power usage, alongside more coordinated planning, can also help address misconceptions about data centres causing electricity price spikes, positioning operators as part of the solution rather than the problem.

One example of this is our project in Fort Worth, Texas, where we are co-siting data centre infrastructure with the power infrastructure of a grid scale battery energy storage system (BESS), enabling faster grid connection. By leveraging existing high-voltage transmission infrastructure and substation capacity including a 100MW BESS adjacent to DFW7, together with renewable energy and energy storage leaders Eolian, we have accelerated time-to-market for this strategic site.

Other partnership examples include our 190MW agreement with Calpine to secure power, grid connection, and land for our DFW10 campus, a new state-of-the-art facility in Bosque County, Texas, our Preferred Partnership Agreement with E.ON in Europe, and our joint venture with Japanese electric utility and power utility Kansai Electric Power Company, Inc. (KEPCO). These examples show how global partnerships can help drive resilience in line with the broader power grid while reducing strain.

What’s Ahead?

Grid access will remain challenging in some markets where grid renewal takes time. In the near term, activity will remain concentrated in the US, and for good reason, with the combination of demand concentration, energy costs and relative power availability creating conditions that are difficult to replicate elsewhere at speed. But that balance is set to shift, with Europe catching up and being driven by a combination of sovereign digital infrastructure priorities, mature enterprise demand, and improving energy frameworks.

As the industry grapples with power constraints, it’s our responsibility to maintain a power-first mindset while acting responsibly to support our digital society. By collaborating, delivering innovative and sustainable infrastructure at scale, and building out the correct capabilities to execute successfully, we can ensure long-term resilience, reliability, and innovation in the data centre industry for years to come.