Northern Virginia has the highest concentration of data centres on the planet, built over decades, originally to service the defence and intelligence community, and other government agencies.
Virginia is now a foundational piece of the US national digital infrastructure serving as a busy hub for the global internet.
But even as the leading market for data centres and having enjoyed the spectacular waves of growth driven by the internet and cloud computing, Virginia officials were still not expecting the scale of the boom in demand that arrived with GenAI.
Victor Hoskins is the chief executive of the Fairfax County Economic Development Authority overseeing the investment attraction that has helped sustain that data centre growth.
In this episode of the Commercial Disco, Victor Hoskins describes the current data centre boom and says Australia can learn a lot from the experience in Virginia.
There are lessons in managing the boom, including in dealing with issues of electricity demand, water usage, and policies that leverage data centre investment to local industries.
As Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton prepares to release a set of Data Centre Principles to guide the AI investment boom in this country, Victor Hoskins says Australia has “all of the advantages” to capitalise on demand for compute.
Managing demand for electricity (and encouraging investment in new power generation) will be a big for Australia, just as it has become a big issue for Virginia. The demand spikes for electricity has led to price rises and some grid instability, creating community conflict.
“You would have an advantage [in Australia], because you’re starting at a place where you have got a complete toolbox,” Mr Hoskins said. “You can use solar, you can use wind, and you can use battery storage so that the solar and wind are more effective.”
Learning from experience includes things like using AI to manage energy consumption from moment to moment, using grey water for cooling, or switching to liquid immersion to cool server racks.
Since the launch of OpenAI’s ChatGPT, the scale and the speed of the AI boom caught administrators by surprise, which itself provides an advantage to Australian policymakers – because they get to see the impact of this booming market.
“It just accelerated much faster than than anyone expected. And honestly, with AI … if you look at the growth, it spikes just as soon as ChatGPT and other GenAI software came out,” Mr Hoskins said.
“And because AI it takes about four times the energy to operate, there’s also [an energy] capacity issue,” because data centres are competing for that capacity with other uses, he said.
“And that’s really been the challenging part. It has been so much [growth] so quickly in northern Virginia that it’s created conflicts with the community.”
This is a fascinating interview for anyone seeking to understand the best ways for Australia to maximise the benefits of the current foreign investment boom in Australia’s data centre industry.
There reality is that Australia does have significant advantages that make it attractive as a location, but it will take smart policy thinking to make sure those advantages deliver benefits to all Australians.
Do you know more? Contact James Riley via Email.