The Rural Revolution is Coming as Generative AI Drives Hyperscale Data Centers

Jeff Johnston

May 1, 2024

Key Points

  • Generative artificial intelligence has taken the data center market by storm and operators are scrambling to stand up new locations to meet its surging demand.
  • New chipset technologies from Nvidia are enabling data centers to process unthinkable amounts of data and complex applications that promise to be the backbone of the next industrial revolution.
  • Data center demand is wreaking havoc on the energy complex. AI data centers could consume as much as 20% to 25% of U.S. power requirements by 2030, up from 4% today.
  • The imbalance in energy markets’ supply and demand – combined with generative AI’s energy-intensive data processing (training versus inference) – is forcing data center operators into secondary and rural markets.
  • These trends present new business opportunities for rural broadband operators that could be parlayed into helping close the digital divide. Data centers also mean new opportunities for rural electric distributors and generation and transmission companies, albeit with greater risk and capital requirements.

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