Big changes in hardware, power and cooling are coming for data centers in 2025 

29.01.2025 395 0

The new year has just begun, and we already have a lot of action taking place in the data center world. The big news just keeps coming and there are many new developments happening in several key data center areas, including hardware, power, and cooling. 

One of the biggest news items for the start of this year was Microsoft’s announcement. The IT giant said it will spend $80 billion this fiscal year to build new data centers around the world. About half of the sum will be for US projects while the rest will be spread across Microsoft’s global data center network. 

The company’s fiscal 2025 ends in June 2025. This means there’s less than six months to fulfill the goal. Of course, it has already spent a lot of money during the first six months of the fiscal year, but the company hasn’t gone into detail. What’s known unofficially is that the company has bought a lot of properties to use for its data centers. It’s also focusing on the construction of facilities and of course, buying the hardware needed, which is quite expensive.  

For its fiscal year 2024, Microsoft spent about $50 billion on capital expenditures. The vast majority of that money went on data centers. So, in its fiscal 2025, we see even more of the same. And again, the main focus will be AI data centers. This means both data centers for AI services and AI being used in data centers to optimize their performance and maintenance. 

Of course, other companies are doing the same. All of the big names – Google, AWS, Meta, etc. are also building data centers for AI. Dedicated and smaller data center operators are also working hard to improve their facilities and respond to both the competition and the demand, and all of this is driving the entire industry to advance their developments. Including the hardware. 

2025 will be big for data center hardware 

Naturally, hardware draws the most attention. Without it there’s not much need for the massive buildings housing the servers and their cooling. DataCenterKnowledge is pointing to five key trends for data center hardware in 2025. 

AI accelerator hardware is one of the main hardware trends. These components are specialized for AI algorithms and provide a much faster and more efficient performance. AI workloads will benefit the most from these accelerators and since these tasks are the main focus now, it will reflect on the data center hardware configurations. That could be a risk in the long term, especially when AI becomes the norm and it’s no longer viewed as an experiment. Then workloads could again begin to diversify and won’t be so focused on AI-only. As a result, we may end up with another need to restructure data centers and add more balanced hardware. 

The second trend will be the growing deployment of DPUs – Data Processing Units. These modules are specially designed to handle network traffic management and other data center-specific tasks which usually are left for the standard CPUs. DPUs take these tasks thus freeing valuable computing resources to be used for client workloads.  

DPUs aren’t new by any means. They have been around for a while, but their main benefits only started to really shine once the AI demand started to overload the regular hardware resources. DPUs are not for accelerating AI workloads. They are becoming vital helpers to CPUs and GPUs for other tasks. 

Of course, with more new and advanced hardware comes increased security risks. Some of them are related to physical hardware. For example, it’s possible that threat actors will try to compromise equipment during its shipment process to the data center. For example, installing malicious firmware or sabotaging the reliability of the components.  This makes it even more important to have strict validation processes that the hardware hasn’t been tampered with. It’s another thing for data center operators to keep in mind along with the regular cyber security which will also need to evolve to deal with new attack vectors. 

Fourth, we will probably see a growing interest in ARM servers for data centers. ARM CPUs have been ruling the world of mobile devices for years. Their expansion into the PC and server world though has been lukewarm at best. Despite that, they never gave up and kept trying to gain market share in those segments, too. In 2024, ARM CPUs made big news for entering the world of AI PCs and AI laptops. While the devices are good, their sales haven’t been all that impressive, possibly due to their high price. Whatever the case, ARM CPUs are still eyeing servers, too. They claim to offer better energy efficiency, optimized for some workloads and higher performance overall. Despite that, even in 2025, ARM servers will more than likely remain niche at best. 

Next, we have even more innovations in cooling. This is logical, considering how much effort is going into computing power. It will create a lot of heat and cooling systems will have to be improved considerably. As expected, it’s a big topic, so let’s expand on it even more. 

The year to cool things down 

Of course, we aren’t talking about slowing down the data center expansions. Quite the opposite. They will continue and that will raise a lot of heat – in both senses! In fact, DataCenter Knowledge even says there’s a “heat crisis” forming in data centers. A round up of analysts’ predictions says that on average data center energy consumption will increase by 12% by 2030. And that’s despite all of the efforts going into optimizing and lowering energy consumption. 

Again, AI is the main culprit. It demands a massive rise in computing power, thus introducing a lot more heat into the servers. Classic air cooling won’t be able to handle it without serious increasing of airflow and equipment, which is neither practical, nor cheap. So, other solutions are emerging, but also an entirely new approach – tailor-made cooling systems. Hyperscale operators for example are forging partnerships with cooling manufacturers to develop custom cooling designs for their facilities. This way they can make the most out of the equipment and achieve that much needed balance between performance, efficiency, cost effectiveness, and futureproofing. 

Most often those solutions include hybrid systems which combine air and liquid cooling. Depending on the location of the data center and the operator’s needs, they may also add heat reusing systems, energy recovery tech, and other solutions. “Data center cooling has reached a tipping point. Embracing resilient and energy-efficient solutions will enable operators to thrive in the future. As resource constraints intensify, forward-thinking cooling strategies are no longer just an option – they’re essential to the data center industry’s survival and success,” says Karin Overstreet, president of Nortek Data Center Cooling to DataCenterKnowledge. 

The big question remains unanswered 

That is how data centers will manage the need for electricity. That was a bit of a problem in 2024 to the point that some experts even said data centers will run out of power within 18 months. We are now far closer to that unofficial deadline and there’s still no answer how to solve it. Optimizations and reducing consumption can only go so far, especially with all the new construction projects happening everywhere. 

Some hyperscalers are now paying for the reopening of old nuclear plants and investing heavily into the development of more sustainable energy sources. The problem here is this is very expensive and as such only realistically accessible to hyperscalers. Smaller operators must compete on the regular energy market like everyone else. Except they have to also bear the negatives from the hyperscalers, too. Mainly the fact that in many data center-heavy regions, these operators are not looked at positively by local businesses and authorities. They feel these facilities are taking their power and competing unfairly against them. Even if smaller data center operators aren’t doing that, they still get treated the same by the public as people and other businesses don’t tend to know the difference between a regular data center and a hyperscaler. Authorities are keen to put restrictions on data centers’ energy consumption to win favor with the local businesses. 

Operators need to focus on sustainability as a key part of their strategy. It could be the solution to many of the restrictions that they face and it may also help them win some brownie points with the locals. It’s far better for operators to showcase they have their own sustainable energy sources and even better if they can use them to offer electricity to the community at a fair price. 

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