The Buzz Behind Data Centres

Artificial intelligence has dominated headlines over the past year. Most of us have experimented with ChatGPT, watched AI-generated videos, or noticed new AI features appearing in the software we use every day.

What often goes unnoticed is the infrastructure making all of this possible.

Behind every AI query, online purchase, streaming movie, email, or digital payment is a data centre.

Think of a data centre as the engine room of the digital economy. These highly secure facilities house thousands of specialized computers working around the clock. They are equipped with sophisticated cooling systems, backup power, networking equipment, and security measures to ensure they never stop operating.

Data centres themselves are nothing new. Businesses have relied on them for decades to host websites, store information, and run critical business systems. What has changed is their scale and purpose.

Today's newest facilities are being designed specifically for artificial intelligence. Training and operating AI models can require far more computing power than traditional applications, driving demand for larger facilities filled with specialized processors and supported by enormous amounts of electricity.

The numbers are significant.

Canada has roughly 240 to 300 data centres, depending on how they are counted, while the United States has more than 4,500 listed facilities. Globally, the data centre industry was valued at roughly US$270 billion in 2025 and is projected to approach US$700 billion by 2034.

For long-term investors, this highlights an important lesson about structural trends.

When a major structural trend emerges, the economic impact often extends well beyond the companies grabbing the headlines.

While software developers receive much of the attention, an entire ecosystem benefits from this buildout. Construction companies, engineering firms, electrical equipment manufacturers, utilities, fibre optic suppliers, cooling and ventilation providers, water management businesses, and semiconductor manufacturers all play essential roles in supporting this rapidly expanding infrastructure.

As we've discussed before, many long-term themes are shaped not only by the companies at the centre of a trend, but also by the businesses that quietly enable it.

Of course, this growth also presents significant challenges.

Data centres require tremendous amounts of electricity. In the United States, data centres accounted for about 4.4% of total electricity use in 2023, with demand expected to rise meaningfully over the coming years as AI adoption accelerates. Water usage is another growing concern, as many facilities rely on water-intensive cooling systems. Large projects can also create concerns around land use, local infrastructure, and the constant background noise generated by cooling equipment and backup power systems.

Communities often find themselves weighing meaningful economic benefits against increased pressure on local resources. Data centres generate construction activity, tax revenue, and infrastructure investment, but once operational, they employ relatively few people compared to many other industrial developments.

These challenges do not diminish the importance of data centres. Rather, they highlight the need for thoughtful planning.

The future of artificial intelligence depends not only on better software, but also on cleaner electricity generation, improved cooling technologies, more efficient hardware, and smarter infrastructure planning. Encouragingly, innovation is occurring across each of these areas as governments and private industry work toward more sustainable solutions.

Some companies are already exploring ideas that once sounded like science fiction. Elon Musk has suggested that future generations of data centres could eventually be located in orbit, reducing some of the land, energy, and environmental constraints faced by facilities on Earth. Whether that vision becomes reality remains to be seen, but it illustrates how rapidly this industry continues to evolve.

One thing is much easier to predict.

Every time you ask an AI assistant a question, stream a movie, navigate with your phone, back up family photos, or shop online, somewhere a data centre is doing the work.

As artificial intelligence becomes increasingly embedded in everyday life, demand for the infrastructure supporting it will continue to grow. For long-term investors, it serves as another reminder that some of the most important trends are often found not only in the technologies we see, but also in the infrastructure quietly powering them.