The digital economy and desire to automate core functions of our personal and business lives are driving tremendous data center demand. To accommodate this demand, data centers have evolved. But I believe we’ve reached a tipping point, and data centers will transform in dramatic ways over the next 25 years.

The positive development is sustainability as a force for transforming data centers for the better. I break it down here but first, let’s see how far we’ve come and where we must go.

Computer rooms to data centers

When computer rooms started in the 1970s, they were concrete bunkers housing an analog mainframe the size of a small house. Next came digital mainframes and minicomputers in multi-use buildings. The era of rack-mounted Intel X86 type servers arranged in very large server farms and clouds came next and the name migrated from computer rooms to data centers.

In these data centers, IT racks were arranged in rows and around 3 kW per rack on average. The average power per rack would rise marginally over a few decades to 5 kW then 10 kW per rack. A large data center in the 1980s was about 3 MW in size. In the 1990s, as we entered the cloud era, we started to see 5-10 and even 20 MW data centers. In the 2000-2010s, a 25-100 MW data center was considered extremely large.

Today, 300 MW data center campus projects are under construction, with plans for 1 GW campuses. People are even trying to get funding for 5 GW projects! At the end of 2023, the estimation for the total GW of all data centers installed worldwide was only 54 GW.

Major changes will happen

The digital economy and automation of core functions are moving through AI, and I see major changes coming for data centers. We have entered 2025, so it seemed an ideal time to put a symmetrical frame on my prediction and look at 25-year intervals: 2000, 2025, and 2050.

Utility power source

CO2 wasn’t an issue with smaller and fewer data centers. Today, they would run off of 100 percent renewable, carbon-free sources if available and will transition quickly when they are.

Data center companies are instrumental in funding new carbon-free energy sources through Virtual Power Purchase Agreements, Renewable Energy Credits, and generating their own carbon-free power in the future. Since 2015, the PPA market has grown an average of 33 percent each year, with Big Tech being one of the largest drivers of this shift.

Onsite battery storage hours

As utility power sources become increasingly distributed, they’ll need to be stabilized with battery storage, which allows data centers to act as a player in the power grid ecosystem.

An energy crisis in Europe and a federal law in the United States are incentivizing alternative energy investment, spurring the growth of battery energy storage systems in those energy-hungry markets. Battery storage is critical to the effectiveness of renewable energy sources because it solves the problem of their inherent intermittency.

Diesel fuel-based backup

Increasing capacity in the data center industry is one of the factors driving the diesel generator market, which is expected to grow from USD 1.1 billion in 2023 to USD 2.1 billion in 2032. But a significant change in data center architecture will be eliminating diesel generators.

While it’s possible that HVO (hydrotreated vegetable oil) and other lower carbon fuels can be mixed and then substituted, diesel generators will most likely go the way of the dinosaurs

Green hydrogen-based backup

As carbon-free utility sources become ubiquitous, electrolyzers are constructed, green H2 costs decrease, and methods for storage and distribution are developed, fuel cells or possibly back-up power turbines running on green H2 will become more viable. Gray hydrogen, mostly consisting of fossil fuel-based steam methane reforming, makes up the majority of the market for hydrogen power.

However, it is projected to be phased out in favor of clean hydrogen, as demand increases and costs become more competitive. By 2050, clean hydrogen is forecasted to make up 75 to 100 percent of hydrogen demand.

Utility collaboration, integration and automation

Contracts and written agreements exist. Next comes data sharing and intelligent decision-making. In the AI future, power automation between data centers and utilities will be commonplace. The global smart energy market is already significant, being valued at USD 153.80 billion in 2022.

Data centers and telecommunications companies are driving growth in this market as they seek dependable power solutions, contributing to a projected compound annual growth rate (CAGR) of 9.6 percent between 2023 and 2030.

Primary power on-site

More and more data center operators will seek to source their own supplies of power on site to help meet their needs. Natural gas turbines will appear first, then technologies like SMRs (small modular reactors) look promising once they are proven to be safe and reliable.

While there has been much excitement surrounding SMRs recently, they will not be a panacea in the near term to meeting on-site power needs. The US, Russia, China, United Kingdom and Canada are leading the way in SMR technology among developed nations, but most of the reactors now under development won’t be online until 2035 to 2040.

Green construction

Green materials were not available in 2000. Going forward, green materials including cement and steel will be used as availability increases and cost decreases. The market is poised for dramatic growth over the next decade as these materials become increasingly desirable and accessible. Globally, the green buildings market is forecast to more than double from USD 565.33 billion in 2024 to USD 1374.2 billion by 2034.

Water use

The industry is developing ways to cool the ramp up in server and rack power densities and water use is rising. In the future, green utility sources will enable cooling that relies very little on water with the trade-off of higher power use. As power becomes carbon free, this will be the formula for the most sustainable data centers.

Average power density per IT rack

The average power density per rack is already on the rise. The AI forces commencing in GPU accelerated servers will continue to drive density higher and liquid cooling will continue to mature.

Direct-to-chip and immersion liquid cooling

A percentage of GPU accelerated servers cannot be effectively cooled by traditional air methods and liquid-cooled servers will start to proliferate. The liquid cooling market is projected to grow at an astronomical CAGR of nearly 25 percent between 2024 and 2031, to an estimated USD 16.79 billion.

Voltage feeding the servers

As the current rating in the IT room makes power cables and copper busway prohibitively large, raising the voltage brings current levels back into a manageable range. At these power levels, data centers will not be “human friendly” and will be highly secure, closed environments. Maintenance will most likely be done under full power downs.

AI operations optimization

Leveraging AI to optimize cooling air and water flows and temperatures, move IT workloads, connect control of the power systems to the utility systems, and using robots for installation maintenance and operations will all be realized by 2050.

Data center transformation

Our industry is notoriously risk averse and the landscape has evolved slowly over the past few decades. But the digitization of society as we move toward complete dependency on IT and data centers is driving scale. The shift to AI to automate our lives requires new IT systems and data centers that are more power intense – data centers that require transformation in many areas. By 2050, data centers will have a fleeting resemblance to today’s large, utilitarian facilities.