AI is Driving Up Data Center Costs
By Todd Boucher, Principal

AI is Driving Up Data Center Costs

An eye-opening revelation from a recent Wall Street Journal article sheds light on the hidden consequences of the rapid growth in AI technology adoption – soaring costs. As data center operators transfer these expenses to their tenants, the price of computing is being driven up significantly.

Why It Matters:

  • The rapid adoption of AI technologies is revolutionizing data center and smart building practices, with numerous use cases being introduced at an astonishing pace.
    • In fact, a recent survey of 500 corporate IT decision-makers revealed that over half of them expressed their intentions to evaluate, deploy, or allocate additional resources to ChatGPT-like technology.
  • Customers often prioritize selecting and deploying technology before considering the potential impact on infrastructure.
    • This holds particularly true for cutting-edge technology such as AI. IT leaders find themselves under immense pressure from external stakeholders, including investors, C-suite executives, and Board Members, demanding answers about their AI implementation strategies. In response to this pressure, they hastily deploy AI, only to be taken aback by the unexpected costs it brings.

    • This familiar trend has also been observed with cloud computing. It follows a predictable sequence: (1) IT faces external pressure, (2) they hastily adopt and deploy without thorough planning, (3) costs exceed expectations, and (4) they are forced to rebalance.
  • As industry experts, it is our responsibility to guide and advise customers who are embarking on the deployment of these transformative technologies, and to make them aware of the far-reaching consequences and implications that come with implementing AI.
    • If they believe they can swiftly implement it in a colocation setting, have they thoroughly assessed whether the colo infrastructure can handle such a high level of density? Have they carefully considered the implications of the rising costs involved?
    • Have they thoroughly evaluated the advantages of deploying on-premise?
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