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No wonder there's a bubble - study claims nearly all of the worlds data
centers are built in the wrong climate

Date:
Sun, 21 Dec 2025 23:30:00 +0000

Description:
Most global data centers are built in unsuitable climates, straining cooling,
energy, and infrastructure as AI and cloud demand rise.

FULL STORY

The majority of the worlds data center capacity is located in climates that
impose permanent cooling and energy efficiency penalties. 

According to industry guidance from ASHRAE, the optimal inlet air 
temperatures for data centers range from 18C to 27C. Yet an analysis mapping
global data centers shows that nearly 7,000 of the 8,808 operational
facilities operate outside this range.

Climate misalignment is now the global norm

About 600 facilities sit in areas where average annual temperatures exceed
27C, while many others operate in cooler regions below 18C. 

Singapore, for example, has temperatures hovering around 33C, with humidity
levels frequently above 80%.  Yet the country hosts more than 1.4 gigawatts of
operational capacity, and authorities have approved several hundred additional
megawatts under tighter efficiency controls.

Higher ambient temperatures increase cooling demand and reduce electricity
transmission efficiency, placing additional strain on local power grids. 
Data centers accounted for about 7% of national electricity consumption in
2020, with projections indicating a sharp increase if capacity expansion
continues at the current pace. 

Demand for cloud hosting has also accelerated construction in regions already
experiencing sustained heat. 

According to international energy estimates, data centers consumed roughly 
415 terawatt-hours of electricity in 2024, or about 1.5% of global demand. 
That figure is expected to more than double by 2030 as higher-density systems
proliferate. 

Location decisions for servers are typically driven by power availability,
electricity pricing, water access, land costs, and regulatory incentives. 
These considerations often outweigh temperature suitability when operators
evaluate new projects. 

Air cooling remains the dominant approach globally, accounting for just over
half of deployed data center cooling systems. Liquid-based cooling is gaining
traction, particularly for high-density racks drawing well above 100 kilowatts,
but retrofitting existing facilities remains capital-intensive.

Many of the hottest data center markets also face constrained power and water
resources, which limits the effectiveness of mitigation strategies. 

Risk assessments indicate that by 2040, extreme heat could affect roughly
two-thirds of major data center hubs worldwide. 

In several countries, including Singapore, Nigeria, and the United Arab
Emirates, every operational facility is already located in zones exceeding 
the 27C threshold. 

Taken together, the data suggest that current expansion patterns prioritize
short-term demand and regulatory compliance over long-term environmental
efficiency. 

There are reports that AI is in bubble territory, with prominent figures such
as Michael Burry and Pat Gelsinger warning of overvaluation and speculative
hype. 

The rapid expansion of AI workloads is driving unprecedented growth in data
centers, which sharply increases power demands and operational costs. 
This surge in energy use illustrates one clear economic consequence of the
speculated AI bubble, linking inflated expectations to real-world
infrastructure strain. 

Via Tom's Hardware 

======================================================================
Link to news story:
https://www.techradar.com/pro/no-wonder-theres-a-bubble-study-claims-nearly-al
l-of-the-worlds-data-centers-are-built-in-the-wrong-climate

$$
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