Forum Topics NXT NXT Bear Case

Pinned straw:

Added a month ago

Bear case from none other than Respeculator. Commenting on where NextDC can find the energy supply to provide the GW

I only follow him mainly because of his mathematical mind.

https://twitter.com/respeculator/status/1762713738296414378

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I'm not sure how correct this is as I don't know enough about the energy marketplace.

I'm sure NextDC can find some source by constructing a few solar panels/wind turbines near their Data Centres? :)


mikebrisy
a month ago

@edgescape Just continuing the theme - the issue of electricity equipment and supply constraints driven by AI is a real thing.

Here an article from last year from Scientific American on the subject. And more recently, Elon Musk has gotten on the band wagon in this post in New Atlas.

As demand grows, innovation will also continue driving greater energy efficiency in chips and the related infrastructure. But will it constrain the AI hockey stick? Will it start to bring greater costs to bear and limit applications and utilisation?

And what does this mean for the share price of firms like $NVDA?

There's always been cycles in these industries. What constraints are going to drive this one?

This underscores my earlier comment that I don't understand the full life cycle economics of datacentres, and I wonder whether the market in its exuberance is also running blind. What if the sustaining/renewal capex requirements 3, 5, 7 years down the track are very different to how the market is current valuing $NXT and $MAQ etc? This sector is already capital intensive, but what if its even much more capital intensive than we realise?

I don't have any answers, but equally, I'm not sure the market does either.

Interested in views of other StrawPeople on this as ever.

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edgescape
a month ago

@mikebrisy

Have a look at the half year update from IPD group for a bit of insight.

As well as implementation of High voltage infrastructure for data centres, they also supplied some low voltage switch gear.

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Southern Cross electrical also has some commentary of their involvement with Next DC

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But as you mentioned the question is how much energy will actually be required to keep the data centre running for AI workloads?

From my tour around one facility in Sydney, there are lots of things I've observed

  • Temperature control and environment monitoring
  • Ducted air con and sections with different temperatures (some feel cooler than others)
  • Secure access and monitoring into the main facility.
  • Secure electronic access into customer cages
  • Rooms to stress test various equipment and servers before installing into the server cage.
  • Fire suppression
  • Lots of redundancy such as power, UPS, cooling etc...


So lots of things go on in these places and I've definitely seen a step change in evolution from the basic warehouse with server cages and blade servers to state of the art facility described above.

Workloads for cloud computing applications are generic and predictable therefore not much issue working out power requirements

But AI workloads could be a different matter as GPU processing for these tasks would not only consume power (both from the processing and the fan activating), but also generate heat. That would push up the air conditioning usage as well. The air conditioning wear and tear and power consumption is probably the big unknown in this case as not much has been written here. I noticed the Scientific America also mentioned cooling as a big issue.

Guess we have to see how this plays out in a few more years when DCs start replacing parts of their ducted systems (zone dampers, compressors etc)..As well as other major components like switches etc.

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mikebrisy
a month ago

Data centres need firm supply, so they’d also need to have contracted for firming, or otherwise have batteries, pumped hydro or gas, given the 99.99% uptime requirement.

I haven’t looked at the analysis, but I do know from my energy advisory days that the gentailers were looking at M&A in data centres because they are such a major energy demand, and with AI the energy demand is only going to increase.

While I’m online, I’ve reversed earlier decisions to invest directly in data centres because I don’t understand the full life cycle economics, including energy, upgrades and replacements due to the short lifecycle of the technology in the servers.

Disc: Not held (previously held $NXT and $MAQ)

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edgescape
a month ago

@mikebrisy The whole solar / turbine idea was meant as a joke and hence the smiley face at the end. I have been inside many data centres and know the requirements.

Having said that, there is a huge wind turbine built at one of the technology parks in Berkshire along the M4. I can't remember where exactly.

Update: It is Green Park, Reading UK

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mikebrisy
a month ago

Sorry, I've definitely been suffering sense of humour failures this week - I put it down to data indigestion. Plus I am also a bit of an energy nerd.

Ha! I often used to drive by the Green Park Wind Turbine on the M4 Berkshire - there's been a wind turbine there since the mid-2000s. Is that the one you are referring to? (Probably others since I left, but it was one of the first big windmills in SE England.)

I worked in the general area from 2003 until moving to Australia in 2010. Green Park has several tech and other companies hosted, a couple of big distribution centres, and is all the home of Reading FC. So lots of load centres.

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edgescape
a month ago

Yes, this is the windmill at Green Park which had been there when I worked and lived in the area since 2008-2012. Used to go to Costco there during lunch time with a work colleague that had the membership. And also drove past it whenever heading west along the M4 for drive trips so it is one landmark etched in my memory.

But I was also told by someone there were questions about the economics of running that windmill/wind turbine and think it was more of a statement by Reading Council of pushing their green credentials to become a city from a major town than anything else.

Lots of things have changed since then. On my last trip in 2015, Reading railway station is totally transformed to what it was back then when it was just a large lot of cramped platforms and a small thoroughfare. Yet the ambitions of becoming a city still out of reach for Reading


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