Nvidia and Other Investors Back Applied Digital With $160 Million in Funding. Read More >>
Blog

What A Difference A Year Makes

In the fast-paced world of data centers, staying ahead of the curve is not just a strategy – it’s a necessity. Last month, Applied Digital had the opportunity to attend and present at the Data Center Dynamics (DCD) Conference in New York City. We did the same in 2023. In many ways, it’s evident that the landscape of data center innovation is rapidly evolving. In other ways, it would seem that there’s been less momentum than you might expect.

One year later, the DCD event showcased recurring themes that underscore focus areas critical to the industry. Supply chain dynamics, power infrastructure, AI integration, sustainability and workforce challenges were central pillars shaping conference conversation. One of the most interesting realizations is that the industry has made it to an inflection point. What is happening in high-capacity compute is exciting for everyone.

Industry analyst firm, Gartner, made famous the idea of a “hype cycle” a graphical representation of the maturity of emerging technologies. It’s common for new technologies to get out of the announcement gate and experience a period of market anticipation where expectations are inflated and over promised. Getting past the trough of disillusionment, however, is a different feat. And this appears to be where the industry finds itself. At Applied Digital, we are excited to realize just how far ahead of the curve this talented team is, and the HPC data center environments are. It only means that Applied customers will find themselves on the road to productivity and future innovation that much faster!

Second Verse, Same as the First

On a number of fronts, the DCD Conference revealed only nuanced advancements into the evolving landscape.

  • While supply chain improvements were noted in some areas, challenges clearly persist, underscoring the need for strategic partnerships and innovative solutions. In fact, when it comes to supply chain it’s clear that it’s getting better for some and way worse for others…
  • AI’s role in data center management took center stage, with panels highlighting its potential to redefine blueprints and enhance operational efficiency.
  • ESG compliance emerged as a critical consideration, emphasizing the importance of environmental sustainability in site selection and development. To build today you must prove you won’t be a drain on the resources by coming to that spot of the country.

And Yet, Everything’s Changing

While the industry continues to try and retrofit legacy spaces into high performance data centers (think hybrid data centers), flexibility and adaptability are both the buzzwords and the required mantra of the moment. Our approach has involved a strategic gamble on the adaptability of our designs, anticipating significant changes in requirements in a very short time. This forward-thinking strategy is proving beneficial as we now face a broad spectrum of tenant demands, necessitating a highly flexible approach in our future designs. Three areas, particularly, showed just how much change in such a short amount of time was afoot:

  • Cooling – In 2024, the cooling “mythology” of 2023 has become a reality. 2023 introduced direct to chip cooling as the next big thing, with teams targeting liquid cooling at 70+kw per rack. Capex on liquid cooling was forecasting 2-3x that of air, but showing that opex was significantly less expensive over time. Today, liquid cooling is having a moment of normalization. The investment forum panel at DCD shared that “50% of today’s total opex spend is mechanical cooling with an industry average of 1.5 PUE. Liquid Cooling is something that is drastically reducing that.” Applied is demonstrating significant advancements in liquid cooling capabilities per rack and is evolving that conversation to contemplating thermal runways during power outages or other operational challenges.
  • Labor – Labor is a constraint with more than 70% of the industry workforce having 10 or more years of experience. As such, the need to attract new talent is high.
  • Where AI Is Not Reaching -What may have been most revealing is where AI is not being able to play a current role: labor and supply chain. There’s a needed skillset that continues to constrain labor that AI doesn’t yet meet. And due to the high-human touch requirement of supply chain, this is an area not likely to be automated by AI much in the near future.

Others Are Considering… Applied Digital is Already Doing

The ramifications of all these areas have high implications for the way Applied works. Prioritizing ESG compliance in site selection and development aligns with the company’s commitment to sustainability and environmental responsibility. Leveraging AI-driven solutions to optimize operations and enhance efficiency positions the company at the forefront of innovation. Moreover, addressing workforce challenges through strategic partnerships and talent acquisition initiatives ensures a robust and skilled workforce ready to tackle the demands of the industry.

And yet beyond that, real excitement comes when the team thinks about the industry challenges Applied has already made great strides in. Areas like:

  • Power Generation – companies are implored to build data centers closer to the generation of power. That’s the Applied model. Check. ✓
  • Data Center Design – many companies taking hybrid approach looking to take low density and convert to high density later. Seeking to enter into the liquid cooling space is a future initiative for traditional data center providers. Applied designed for high compute from the start and liquid cooling is already a feature. Check. ✓
  • Constrained Power – Land consultants are facing challenges due to power scarcity across the nation. Applied has already secured access to the power and is ready now. Check. ✓
  • Beyond AI – While AI advancements are overshadowing edge and 5G in market penetration and scope, those technologies are continuing to make progress. Applied is not ignoring these advancements. Check. ✓

The data center industry is at a point of inflection, with excitement surrounding AI integration and other technological advancements. For the team at Applied Digital it is all the more exciting when we realize that the HPC environment we built and have ready is the one the market is clamoring for… and the one that we’re already thinking ahead on and proactively contemplating future innovations.

Trusted By