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The data centre sector is facing a pivotal moment. As AI models become more complex and cloud computing adoption increases, the need for compute power and the energy behind it is rising sharply. Simultaneously, operators are under pressure to meet stringent sustainability goals. The real challenge now is not whether to pursue greener operations, but how to achieve sustainability at the scale the digital economy demands. Here, Nathan Charles, our Head of Customer Experience, explores the evolving balance between performance and sustainability.
The rapid adoption of AI across industries like healthcare, finance and manufacturing is placing significant strain on data centre infrastructure. Training large models consumes vast amounts of energy and once deployed, AI applications continue to drive high compute demand through constant inference.
At the same time, the shift to hyperscale and hybrid cloud models is concentrating workloads in centralised environments. This aggregation increases pressure on power and cooling systems, pushing operators to balance performance, scalability, and environmental efficiency under tightening sustainability expectations.
The innovation curve
In response, data centre operators are turning to increasingly sophisticated technologies to reconcile energy efficiency with compute density. Liquid cooling, traditionally confined to high-performance computing (HPC) environments, is now being adopted in more general-purpose deployments. Solutions using dielectric fluids or water-based direct-to-chip systems enable significantly higher heat transfer efficiency, supporting server rack densities beyond the limits of conventional air cooling. These approaches also allow for more compact facility designs and reduced mechanical load on air handling systems.
Paradoxically, AI is one of the main contributors to rising data centre energy consumption, but is also a critical tool in mitigating that same impact. The integration of AI into thermal management has enabled the development of adaptive cooling systems that respond dynamically to fluctuating environmental and operational conditions. These systems continuously analyse sensor data, model thermal behaviour and adjust cooling strategies in real time.
By eliminating overcooling and aligning thermal output with workload demands, AI-powered cooling reduces unnecessary energy expenditure and supports more granular environmental control, particularly valuable in high-density AI training zones where thermal loads shift rapidly.
But cooling is only one part of the equation. The sourcing of electricity itself is under scrutiny. Operators are making significant investments in renewable energy, with power purchase agreements (PPAs) for wind, solar and hydropower becoming standard practice among leading cloud providers. In some cases, data centres are being built adjacent to renewable sources, reducing transmission losses and increasing visibility over carbon intensity.
There’s also growing interest in innovations like on-site microgrids, battery energy storage systems (BESS), and hydrogen fuel cells. These technologies offer the promise of flexible, clean power generation that can reduce reliance on fossil-fuel dominated grids. However, questions remain around scalability, reliability, and economic viability, particularly for smaller players without the capital or land access of hyperscalers.
The influence of major cloud providers is significant. Companies like Microsoft, Google and Amazon Web Services are among the largest electricity consumers globally, but they're also leading advocates for sustainable infrastructure. Their strategies, certifications and carbon-neutrality targets are shaping industry expectations, whether through demands on colocation partners or by influencing regulation.
By open-sourcing designs and promoting industry-wide frameworks, these providers are pushing the market towards greater transparency and accountability. Initiatives such as carbon-aware computing, which shifts workloads to times and locations with cleaner energy signal a major shift in how digital services are optimised for sustainability.
Yet this leadership also highlights a gap. Hyperscalers have the leverage to secure renewable energy deals and invest in bespoke cooling technologies, while smaller operators often lack the resources to keep pace. This risks creating a two-tier system where sustainability becomes a competitive edge rather than a shared standard.
Despite strong momentum towards sustainability, data centre growth is constrained by infrastructure realities. In many regions, power grids are not equipped to support the pace or scale of expansion, with new grid connections often delayed by regulatory hurdles and ageing systems. This has already triggered moratoriums on new builds in countries like Ireland, highlighting the gap between digital growth targets and physical capacity.
Cost is another limiting factor. Although green technologies offer long-term savings, the initial investment for retrofits, renewable sourcing, and advanced cooling remains high, particularly in regions where price-performance still dominates procurement decisions.
Global variation further complicates progress. In markets with low-cost, high-carbon electricity or limited regulatory pressure, the incentive to invest in sustainable infrastructure weakens, resulting in a fragmented transition rather than a coordinated shift.
The question of whether green data centres can meet growing demand is one of coordination. Addressing this challenge requires cross-sector collaboration, from utilities and grid operators to policymakers, manufacturers and cloud architects.
At the same time, the industry must continue to innovate, not just in hardware and infrastructure, but also in software that can optimise workloads in response to environmental factors. AI may be increasing demand, but it also holds potential as part of the solution, enabling smarter energy use and dynamic load balancing.
Green data centres are essential for a digital economy that seeks growth without worsening the climate crisis. Though the path to sustainable scaling is complex, targeted innovation, intelligent design and collective effort provide a credible path forward.
To find out more about ways to optimise data centre infrastructure for the demands of AI and sustainable growth, visit www.oryxalign.com/data-centre or email us at hello@oryxalign.com.