Workhorses or werewolves? Data centers are changing – inside and out

  • The interior design of data centers has shifted drastically in recent years

  • Today, more room is required for support infrastructure than ever before

  • PowerHouse Data Centers is expanding its footprint and closely watching how the AI hype impacts the market

You know in those old werewolf movies how the person transforming contorts in agony as their organs shift and their ribs pop? Yeah, that’s kind of what’s been happening to data centers over the past couple of years.

Though certainly less hairy, data centers – like werewolves – have grown in size and height, with larger campuses and multiple stories per building becoming the norm. But significant changes have also been happening on the inside, making the guts of data centers almost unrecognizable from just a few years ago.

Luke Kipfer, VP of Data Center Development and Construction for PowerHouse Data Centers, told Silverlinings that the amount of space dedicated to support infrastructure has drastically increased in recent years while that allocated for data halls has shrunk.

It used to be that 75% of the space in a data center was reserved for data halls (aka, the areas where the server shelves sit), with the remaining 25% allocated to support infrastructure. But over time, the mix shifted to a 50-50 split. More recently, Kipfer said, the split has shifted back to 75-25, but this time in infrastructure’s favor.

Wait, what? Aren’t data centers adding more compute power, not less?

Yes. But the amount of compute that can be crammed into each rack (i.e. density) has steadily risen. And that has implications for the amount and type of power, cooling and fiber infrastructure needed to support modern data centers.

We’ve talked about liquid cooling a lot on Silverlinings. But here’s how the practical implications play out in data center design.

As the power to cabinets increases from 10-ish KW or so to 40, 80 or even 100+ KW, the cooling needs increase beyond what air cooling alone can handle. That means fan walls are disappearing in favor of direct liquid cooling systems. Those systems require coolant distribution units (CDUs) and thus more space in the data centers outside the data halls.

This trend is expected to continue. Dell’Oro Group recently tipped liquid cooling to account for $3.5 billion of the $12 billion data center thermal management market by 2028, growing from about 10% of revenue today to roughly 30%.

Kipfer explained there also needs to be more space for fiber running within data centers to connect different server clusters and mechanical and electrical infrastructure to support the higher power racks. A 15 megawatt data hall requires roughly 3X the power infrastructure of an old 5 MW hall, he noted. And that translates to the need for more space to be allocated to equipment rather than servers.

Thus, we have our very own techno-werewolf.

PowerHouse who?

PowerHouse Data Centers is a subsidiary of American Real Estate Partners (AREP). AREP used to play primarily in the commercial real estate market before it launched PowerHouse in 2022 to capitalize on the data center boom. It specifically targets projects designed to meet the needs of hyperscale clients.

The company started by building a handful of data centers in the hub of northern Virginia. Kipfer said when he joined its ranks about two years ago the company had around five buildings in some stage of design or construction totaling roughly 400 Mw of capacity. Now, it has committed to building 27 structures with more than 2.4 Gigawatts of total capacity.

As part of its expansion, the company has begun looking outside northern Virginia. Already it has projects lined up in Spotsylvania, Virginia and Reno, Nevada.

Kipfer told Silverlinings these locations basically provide an “overflow valve” for key markets (like northern Virginia and, in Reno’s case, Santa Clara, California) that face power and land constraints.

In terms of what it’s looking for in new sites, Kipfer said it’s a combination of land (ranging from 50 to 400 acres, depending on the project), power availability (the more renewable sources, the better) and receptive local government.

He added the company is actively pursuing new markets, targeting 3-5 key areas for its next projects. There are another few emerging markets it has its eye on, he said.

The big question now is whether the promise of artificial intelligence (AI) will play out as the industry expects.

“It’s really going to be interesting to see what real impact that has on the market,” he concluded. “If we have this conversation a couple years it’s going to be ‘did things end up becoming totally different because of AI or did it just become this niche market like edge. That’s the biggest talking point now in the data center market.”