Data Centers: Overview, Growth, and Impacts

A data center is a facility housing computer systems, telecommunications, and storage, serving as critical infrastructure for global financial systems, cloud services, machine learning, and artificial intelligence. The Utah Data Center (2013) is a notable example.

Data centers vary in size and structure, categorized into onsite enterprise centers, colocation facilities, hyperscale data centers (owned by large cloud providers), and smaller edge data centers. Hyperscale and colocation facilities collectively use about 74% of U.S. server energy consumption as of 2023, reflecting a shift from on-premises infrastructure.

For business continuity, data centers typically include redundant components, robust power supply, network infrastructure, environmental controls (cooling, fire suppression), and physical/data security. These facilities are energy-intensive; global data center electricity consumption was approximately 415 terawatt-hours (TWh) in 2024, accounting for 1.5% of global demand, with projections to double by 2030.

The rapid expansion of data centers has led to regulatory debates on tax incentives, grid impacts, water consumption, and climate commitments. The AI industry's growth exacerbates strain on electric grids and increases electricity costs, sparking opposition from local communities in regions like Europe, the U.S., and South America. This local resistance has resulted in delays or halts of billions of dollars in data center projects between May 2024 and June 2025.