Big Tech Will Go Around the World in Its Search for Cheap Energy

In the north-south of Malaysia is the region of Johor, known for its beaches and mountain forests. But Johor has a new booming business: data centers to generate energy AIand Microsoft is making more than $2 billion in data center revenue. For tech giants, electricity has become the new fuel. The largest AI facility would require 90 MW, enough to power thousands of American homes. With AI applications on the rise, from chatbots to AI assistants, the needs are growing. One industry it is planning a data center that needs 10 GW (more than a hundred times more than what is needed today). Finding cheap, reliable energy is now a priority for technology companies like silicon chips.

In 2025, major technology companies will roam the globe to acquire kilowatts, megawatts and gigawatts. At board meetings, discussions about server capacity are overshadowed by discussions about grid capacity and the future of energy. Countries blessed with very cheap energy are taking advantage of this new opportunity and developing policies to attract AI businesses with the same urgency that is reserved for manufacturing.

Countries that have already won the data center space, such as Ireland and Singapore, will find their capacity to explode ahead of the GenAI boom. This has opened up opportunities for competitors, not only in Malaysia but also in Indonesia, Thailand, Vietnam, and Chile. Latency is less than keeping electrons moving.

Cheap energy has become a priority for companies: Just as companies in the past placed their meters near ports, their factories near coal mines, AI companies are trying to locate themselves near where they can get electricity regularly—and efficiently. prices.

Location really matters. Half of the electrical energy in a data center usually comes from air conditioning to keep the servers from overheating. Cold climates or coastal areas are becoming increasingly sought after as potential locations.

This attraction to provide AI is so strong that the big tech companies are buying dirty energy to fulfill it, investing their resources and marijuana’. Decarbonization targets at stake.

Countries are highly competitive in the data center business. Tax breaks are popular: More than half of the US states—including Arizona, New York, and Texas—offer workers tax breaks, even favorable rates for land purchases and concessions for energy efficiency. In Malaysia, Green Lane Process management processes speed up construction approvals, cutting red tape to expedite construction—and electrical wiring—for data centers. Allowing data laws to allow information to flow freely.

This connection between watts and algorithms is also used to draw a global energy map. That’s as big a change as the oil boom in the 20th century, but it doesn’t look good. No pipelines are being built, no tanks are being diverted. Instead, countless warehouses humming with servers are becoming the new hub of the world.

How this changes global influence is unclear. The real AI research — where the breakthroughs happen — will remain in research centers in San Francisco, London, Beijing, and Paris. Data centers that adopt these algorithms to market, however, will be very low-cost, stack-large and sell low-cost products.

This electro-diplomacy will be an important pillar for the next few years. The development of AI is less about algorithms and more about electronics.

However, countries using this term should be cautious; their chances may be limited as vulnerable countries figure out how to bring enough cheap, clean electricity online to boost hospitality.

For today’s incumbent providers of AI data centers, the challenge lies in turning this temporary advantage into a sustainable frontier. They will need to continue to persuade data centers to create new ecosystems that can thrive long after the “power rush” ends.