The energy demand for data centers is set to skyrocket, with forecasts predicting a nearly 300% increase by 2035. This projection comes as AI-driven computing becomes the backbone of digital infrastructure, pushing the limits of power grids. For entrepreneurs, especially those in Europe, understanding this growth and its implications is crucial. As someone navigating the world of startups with limited resources, I see this as more than a challenge, it's also an opportunity.
Why Entrepreneurs Should Care About Data Center Energy Growth
As business owners, we depend on the services these data centers provide, from cloud-based SaaS tools to AI solutions. For many of us, especially those bootstrapping startups, access to these technologies is one of our most significant advantages. But there's a flip side. Surging electricity demand means rising operational costs, potential grid instability, and, in some areas, changes in data center pricing strategies that could impact the affordability of these solutions.
For women entrepreneurs, especially, who already face systemic hurdles in business, understanding how this sector's evolution may influence tech prices and accessibility will help us prepare. Awareness is key to staying ahead and making informed decisions.
Breaking Down the Trends
Here are the key trends driving the energy growth in data centers and what they reveal:
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Artificial Intelligence's Growing Role:
AI is at the center of this surge. Training large language models and algorithms like GPTs requires immense computational power. According to BloombergNEF, AI workloads may make up 40% of total data center computing by 2035. This is significant because businesses harnessing AI tools for customer analytics or operational workflows will rely even more on larger, more energy-intensive data centers. -
The Shift to Hyperscale Facilities:
Hyperscale centers, those larger than 500 MW, are emerging more rapidly. Facilities of this size can power entire tech ecosystems, but they also add pressure to local grids. Entrepreneurs working on innovative SaaS platforms or AI solutions should account for evolving costs of services that are tied to these facilities. -
Rural Expansion of Data Centers:
With fewer urban areas available for expansion, data centers are moving to rural zones. This trend benefits regions with idle land but complicates infrastructure planning. As someone who built startups while working across different countries, I see this rural push shifting employment and opportunities geographically. -
Investment in Renewable Energy Sources:
Hyperscalers such as Google, Apple, and Microsoft are committing to sourcing clean energy via on-site solar and wind farms or purchasing carbon-free grid electricity. For entrepreneurs with a sustainability focus, this might create alignment opportunities to partner with or market eco-conscious digital solutions.
Lessons for Female Entrepreneurs in Europe
Europe already emphasizes renewable energy, and that creates benefits and challenges. Here's what I’ve learned building businesses in this space:
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Anticipate Cost Hikes:
Electricity prices will likely fluctuate, especially in areas facing grid stress. Women founders should budget with this volatility in mind, particularly when selecting cloud providers or scaling workloads. -
Sustainability As a Selling Point:
Female entrepreneurs building AI or tech startups can differentiate themselves by ensuring operations align with Europe’s push toward carbon-neutral practices. For instance, using data centers that rely on renewable energy could become a winning narrative in your branding. -
Plan Regionally, Act Globally:
Expansion strategies for startups based in Europe should consider how data center energy infrastructure interacts with global tech needs. For example, choosing regional hosting providers in stable grids might reduce long-term risk.
A Quick "How-To" Guide for Entrepreneurs
Here’s how you can react strategically as this trend continues:
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Review Your Cloud Setup:
Regularly audit which cloud service providers you use. Ask about energy sourcing and how their costs might evolve over the next decade. -
Leverage Public Funding:
As the EU pushes for innovation paired with sustainability, grants often support businesses working toward greener tech solutions. Look into these programs to fund projects needing heavy computing. -
Diversify Workloads:
If operating in industries requiring high computational power, consider using secondary data centers in countries with lower electricity pricing or more stable grids. Balancing workloads this way helps avoid being locked into one high-cost region. -
Collaborate on Sustainable Projects:
Seek alliances with partners or suppliers focusing on green energy in tech. Doing so aligns with brand values, wins trust in eco-conscious markets, and gives a strategic edge.
Common Mistakes to Avoid
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Ignoring Long-Term Data Center Costs:
Some founders think short-term and don’t inquire about how shifts in energy dynamics might affect future subscription rates and data costs. This oversight can cripple profitability. -
Not Focusing on Efficiency:
Startups often underuse hosted servers but still pay for peak computational capacity. Reviewing and optimizing usage saves money and lowers your environmental footprint. -
Lack of Adversity Planning:
Europe’s grids face unique vulnerabilities. Data centers may implement energy-saving measures, including throttling non-priority workloads. Plan for contingencies to avoid disruptions.
What Can Entrepreneurs Do with These Insights?
Understand that the evolution of data centers isn’t isolated. It’s impacting us all. My own companies have pivoted platforms numerous times to scale effectively while keeping costs manageable. For instance, when energy prices rose sharply in certain countries, we shifted our workloads to providers operating in less-affected regions.
The lesson is clear: awareness and adaptability are critical. And as more governments push for green energy, this industry shift opens up avenues for climate-positive tech efforts.
Closing Thoughts
Surging data center energy demand creates challenges, but it also holds opportunity for the savvy entrepreneur. Use this shift to empower your strategy. Not only can you build a future-proof business for yourself, but you can contribute to a smarter, greener ecosystem of digital innovation. As I’ve found, thinking ahead and staying aware of global energy patterns makes all the difference when scaling a tech-based venture.
If you're a female entrepreneur in Europe, there’s no better time than now to align yourself with sustainable growth trends. It’s not just a question of necessity, it’s a way to lead confidently into the future.
FAQ
1. Why is data center energy demand forecasted to rise nearly 300% by 2035?
The increase in demand is driven by the expansion of hyperscale data centers and the immense energy requirements of AI for training and inference, which is expected to account for 40% of total data center computing by 2035. Read more about the demand forecast
2. What is the projected growth rate of global electricity used by data centers?
Global electricity usage by data centers is projected to grow to 1,200 terawatt-hours by 2035 and 3,700 terawatt-hours by 2050. Explore BloombergNEF’s insights
3. What are hyperscale data centers, and why are they significant?
Hyperscale data centers are extremely large facilities, typically exceeding 500 MW of power capacity, designed to support vast tech ecosystems. These centers are essential for hosting AI-driven workloads, but they contribute to increased electricity demands.
4. How are data centers impacting local power grids?
Data centers are putting massive pressure on power grids, especially in regions like PJM Interconnection and Texas's Ercot grid. Grids are facing challenges in accommodating new data center connections, leading to electricity price increases and concerns about grid stability. Learn more about the grid impact
5. Why are data centers increasingly being built in rural areas?
Urban areas are running out of space, leading to a rapid shift towards building data centers in rural regions. This trend also aligns with access to cheaper or renewable energy sources.
6. How is artificial intelligence driving this energy demand surge?
AI models require significant computational power for training and inference. This has led to a sharp increase in energy consumption within data centers, with AI projected to represent 40% of total computing workloads by 2035. Discover more about AI’s energy impact
7. Will renewable energy play a role in addressing data center power needs?
Yes, companies like Google, Apple, and Microsoft are heavily investing in clean energy sources like solar and wind, as well as 24/7 carbon-free energy procurement. This aligns with global sustainability goals.
8. What is the role of regulatory bodies in managing data center grid strain?
Organizations like PJM Interconnection and the Federal Energy Regulatory Commission (FERC) are exploring policies to enforce orderly connections and manage the grid stress caused by new data centers. Explore the regulatory perspective
9. How can entrepreneurs prepare for fluctuating energy prices due to data center expansion?
Entrepreneurs should evaluate their cloud provider contracts and consider future energy price fluctuations while budgeting. They can also explore regional hosting providers in areas with stable grids and lower costs.
10. What are the sustainability opportunities for tech startups in response to this trend?
Startups focusing on climate-conscious operations can align with Europe’s push toward carbon-neutral practices. By sourcing greener hosting options and leveraging renewable energy, they can differentiate themselves in eco-conscious markets. Learn from BloombergNEF’s sustainability insights
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.
