Lead or be regulated: Future-proofing data centers

Article published by Data Centre Review on May 31 written by Tatu Tuominen, Director of Public Affairs and Communications

Nearly 100GW of new data centers will be developed between 2026 and 2030, doubling global capacity, according to a report by JLL.

This unprecedented demand for digital infrastructure is fueled by the increase in uptake of AI technologies, and in 2026, as many AI models move from test cases to commercial use, the data center industry will have to scale at an incredibly rapid rate.

The European Commission has announced plans to set up AI gigafactories across Europe and has proposed the Cloud and AI Development Act to bolster the continent’s digital infrastructure at speed. This is progress for the industry, but there are significant risks involved when the speed of development overtakes innovation and operational credibility, risking a fragmented, untrusted long-term legacy.

One risk is the very real possibility of stringent, sweeping EU / government regulations aimed at ensuring consistency and adherence to industry standards. And whilst that in itself is a positive step, enforceable mandates could promote complex administrative procedures that are less flexible or do not consider local nuances that result in slower decision-making and ultimately stifle innovation.

With as many as 83 percent of businesses citing AI as a top priority for future plans, the momentum of high-performance digital infrastructure development will undoubtedly impact the global economy. As a result, data center operators must take charge of this critical trend by scaling in a responsible way, or risk not being able to scale at all.

Holistic responsibility

The surge in data center development has highlighted the unprecedented power demand that high-performance workloads, such as AI, demand. The International Energy Agency reports that global data center electricity consumption could more than double to 945 TWh by 2030, exceeding Japan’s total consumption today.

ESG and carbon reduction targets are increasingly leading data-intensive businesses to challenge their data center partner on sustainability credentials, leaning towards operators that can mitigate the environmental impact of their IT workloads. This could be through energy-efficient cooling techniques or heat reuse partnerships whereby waste heat from the data center is recycled for use in the local community, as central heating, for example, or through carbon capture initiatives. Large hyperscalers are looking into a variety of solutions to reduce planetary impact. Some even have plans to put data centers in space to exploit solar power and mitigate its use of land and water resources on Earth.

In the last year, US data centers’ use of local water supplies came under scrutiny, and there are increasing concerns over loss of green belt land and wildlife habitats as a result of continued data center development.

As suitable land for data center development becomes increasingly at a premium, it is imperative that data center operators demonstrate responsible planning, transparent operations, and clear community benefit across the board or risk increasingly stringent building regulations that will fuel a loss of both development opportunities and customer acquisition.

In real terms, this means actively being a good corporate citizen, not just ensuring the well-being and safety of the people affected by day-to-day operations or mitigating environmental impact, but going one step further to take part in regenerative practices and engage with local communities to support educational and charitable initiatives.

Data center operators must take charge of this critical trend by scaling in a responsible way – or risk not being able to scale at all.

Political and industry influence

In the last year, the crucial factors necessary for data center development – that is, available land that has robust power and internet connectivity networks – have been the topic of political discussions in many Western countries as governments pledge budget towards driving AI innovation, hoping to gain the economic advantages of technology leadership. Political uncertainty has also fueled the creation of sovereign clouds to ensure the security of sensitive data and its protection by country or region-specific legislation, such as GDPR.

This sudden shift in not only the type of workloads new digital infrastructure must cater to but also the geography it must serve adds another layer of complexity to an industry already limited by ageing power networks and overburdened national grids.

As policy makers, government departments, energy and connectivity experts all vie for attention, it is imperative that data center operators lead the narrative, using real, authentic experiences to ensure appropriate investment, operational best practice, and ultimately the long-term sustainability of the industry.

Collaborating with industry associations such as the Infrastructure Masons, the European Data Centre Association (EUDCA), and the Climate Neutral Data Centre Pact can also help drive standards and regulations to ensure that the needs of the data center industry align with infrastructure investment, governmental support, and engagement of local communities on the ground.

The Nordic model

In the Nordics, a different approach to data center development is already taking shape, one that aligns rapid digital growth with long-term environmental and societal value. Abundant renewable energy, cool climates, and resilient infrastructure provide the foundation, but it is the integration of data centers into local ecosystems that defines the model.

Facilities are designed not as isolated industrial assets, but as contributors to society and a circular economy. This approach transforms data centers from passive power consumers into active participants in the energy system and contributors to economic stability. Crucially, it demonstrates that scalability and sustainability are not mutually exclusive, but interdependent, offering a blueprint for regions seeking to expand AI and digital infrastructure responsibly without compromising environmental or community outcomes.

It seems that the future of digitalization and, arguably, even the global economy, rests on the shoulders of the humble data center, and as a result, operators have an incredible responsibility to ensure its sustainability and longevity for future generations.

Lessons can be learnt from other industries, such as the palm oil sector or fast fashion, that saw a huge growth trajectory before the environmental and social implications were properly considered. The data center industry must act now to embed sustainability into every decision, ensuring growth today does not come at the expense of tomorrow.

Explore the full article here.