- The data center industry has historically been focused on an understanding of fiber
- Over 18 months, that focus has shifted to power constraints
- But Brian Janous from Cloverleaf Infrastructure, told Fierce that not many folks in the data center industry have a good understanding of the challenges that energy utility companies face
Phenomenal cosmic power — that’s what it’ll take to support the data center demand of the future thanks to artificial intelligence (AI) and its required compute power. There’s only one problem, according to Brian Janous, cofounder of data center siting startup Cloverleaf Infrastructure: not many folks in the industry have a good understanding of the challenges and limitations energy utility companies face when it comes to powering data centers. His company, though, is aiming to change that.
Janous told Fierce that the data center industry has historically been focused on an understanding of fiber, since that’s what was driving site development a decade ago. But over the last years and a half, there’s been an awakening of sorts.
“What’s happened in the last 18 months or so, everyone has collectively realized that this is a power business,” he said. “Electricity is the constraint. It’s not fiber, and it’s not land. It’s how you solve the electric grid because the demand for computation and the demand for GPUs is clearly outpacing the speed at which utilities can make investments in their system.”
Janous, in contrast, knows well what the industry is up against, having spent more than a decade founding and then leading the energy team for Microsoft’s cloud and AI division.
“By the end of my tenure in August of last year, we came to that realization that energy was the only thing that matters” in terms of site selection, he said.
That same idea is the thesis behind Cloverleaf: with the grid under pressure, data center builders need someone to help them pursue a power-centric approach to site development.
“It’s not just understanding the physical infrastructure but also load flows,” he explained.
Cloverleaf will use a proprietary heat mapping tool and engage with utility companies to figure out the best points to draw from the grid, he said, as well as areas which will offer access to sustainable power sources.
The company has already raised $300 million and will acquire six to 12 sites at a time to develop. It will do community engagement, secure permits and generally just prepare each site for construction before selling off the shovel-ready plots to eager data center builders.
Cosmic power demand
In an April 2024 report, Goldman Sachs’ Equity Research division noted that “global data center power demand is poised to more than double by 2030 after being flattish in 2015-20.” The rise of AI is a huge driver, with Goldman Sachs stating it will represent about 20% of overall data center power demand by the end of the forecast period.
“We forecast a 15% CAGR in data center power demand from 2023-2030, driving data centers to make up 8% of total US power demand by 2030 from about 3% currently,” the report stated.
To meet the need, Goldman Sachs’ team said utilities will need to invest $50 billion in new power generation capacity to produce 47 gigawatts of incremental power by 2030. They also predicted new power generated will come from a 60-40 split of gas vs renewable energy sources.
Some utilities are looking at nuclear power, specifically small modular reactors (SMRs), to boost grid capacity in key areas. But Janous said nuclear power isn’t a short-term solution. Neither are hydrogen-powered data centers or ‘off-grid’ solutions like the ones from Crusoe, he argued.
The answer – perhaps unsurprisingly, coming from Cloverleaf – is working with North American utility companies who have the capacity to support data center workloads but lack the experience in doing so.
“A lot of the places that we’re looking at are places that have not seen the same level of development as, say, northern Virginia,” he said referencing the data center hub. “We really kind of thrive when we get to sit down with utilities that are trying to figure this out for the first time because that’s where we can be most helpful and most creative.”