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

• Nearly 7,000 data centers operate outside the efficient 18 to 27 Celsius range
• About 600 facilities face extreme heat exceeding 27°C annually worldwide
• Singapore hosts over 1.4 gigawatts of data centers despite intense heat conditions

The majority of the world’s 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 18°C to 27°C.

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 27°C, while many others operate in cooler regions below 18°C.

Singapore, for example, has temperatures hovering around 33°C, 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 27°C 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

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