Not long ago, power conversations in data centers were straightforward: Do we have enough? Is it cost-effective? Is it green?

Today, the stakes are much higher. After attending the INNIO: Big Power, Clean Energy event in Miami, Tim Caulfield and John Diamond returned to reinforce a message they’ve been emphasizing for years: Power is no longer just a utility; it’s a strategic asset that data centers must build, operate, or partner to control.

From the rise of solar to the exploration of small-scale nuclear, power has evolved from a basic utility to a critical differentiator. The explosive growth of AI and the rise of microgrid experimentation are forcing operators to rethink power generation and management. Ignoring this shift is no longer an option.

The Power Convergence Is Here: Historically, data centers and power generation existed in separate silos. That boundary is now vanishing.

At INNIO, that shift was obvious – a diverse group of attendees—including utilities, OEMs, distributed energy providers, and data center leaders—highlighted the growing intersection between power and digital infrastructure. This year’s event saw a notable increase in data center executives, up from just a handful in previous years, underscoring the urgency of power as a strategic priority.

As Tim and John observed, this convergence is being driven by necessity. Data center power demand is projected to surge from 103 TWh in 2020 to 539 TWh by 2030—a staggering 423% increase. Legacy grids cannot keep up. Operators now face a critical decision: wait for infrastructure to catch up—or take control of their power supply.

Build, Buy, or Bolt On? The New Power Dilemma: The days of simply “calling the utility” are over. Data center operators now face a strategic choice: build their own generation plants, buy power from third-party providers, or bolt on microgrids to ensure localized energy resilience.

John highlighted a growing trend: Early adopters of private power generation are increasingly offloading operational complexities to specialized power-as-a-service providers. This emerging model could redefine how data centers source and manage energy, shifting them from passive consumers to active power strategists.

The Perfect Storm: Aging Infrastructure, Reshoring, and Electrification

The power landscape is experiencing a seismic shift driven by the convergence of three major forces: aging transmission and distribution infrastructure, the reshoring of manufacturing, and the electrification of transportation and industrial systems. Together, these forces are reshaping the power ecosystem and creating unprecedented challenges for data centers.

Let us break down each of these critical elements:

1. Aging Transmission & Distribution: The Ticking Time Bomb

The U.S. power grid, much of which was constructed in the 1940s and 50s, is increasingly fragile and at risk of critical failures. Originally built for a fraction of today’s energy load, the infrastructure has not kept pace with the explosive growth of data centers, electric vehicles, and renewable energy interconnects. For decades, utilities deprioritized major upgrades, focusing instead on incremental efficiency improvements in lighting, HVAC, and industrial systems.

Now, with power demand surging, states like California, Texas, and New York are struggling to maintain grid stability. Renewable interconnects and intermittent power sources are testing the limits of a system never designed to handle high-density, power-intensive operations. Load studies reveal critical weaknesses in transmission networks, raising serious reliability concerns for data centers.

In contrast, emerging markets like India have bypassed legacy infrastructure constraints entirely, implementing modern, adaptable power systems from the ground up. By adopting advanced switching, distributed energy resources, and microgrid technologies, they are better positioned to handle surging power demands without the burden of maintaining outdated systems.

For data center operators in the U.S., the implications are clear: power stability is at risk. Mitigating these vulnerabilities will require localized power generation, microgrids, and advanced power storage solutions. John emphasized that those who move quickly to modernize their power strategies will be better positioned to secure their energy futures as power becomes an increasingly scarce and expensive resource.

2. Manufacturing Reshoring: The Power Tug-of-War</
Four decades ago, heavy manufacturing industries migrated offshore, with China emerging as the global leader in energy-intensive industries like aluminum smelting. Today, 80% of the world’s aluminum is smelted in China, giving it a stranglehold over a critical industrial commodity.

Now, with supply chain vulnerabilities exposed by global events, there is renewed interest in bringing manufacturing back to the U.S. But the power infrastructure that once fueled these industries has either decayed or been repurposed for data centers. Tim and John highlighted that some hyperscalers are converting old industrial sites into massive data centers, leveraging existing power connections. However, this shift is intensifying competition for power—especially in regions where utilities are already constrained.

For data centers, securing power agreements will be critical, particularly as reshoring initiatives ramp up and demand for megawatts surges. Now, with geopolitical tensions and supply chain vulnerabilities exposed, there is a strong push to bring manufacturing back to U.S. soil. But the power infrastructure that once fueled these industrial plants has either decayed or been repurposed.

3. Electrification: The New Power Frontier

The global pivot to electrification is transforming power demand across multiple sectors. While most discussions focus on electric vehicles (EVs), the broader impact extends to public transportation, delivery fleets, heavy equipment, and even marine and locomotive transport.

A typical gas station might have drawn 100 kW with traditional fuel pumps. Now, retrofitting for EV fast chargers could require 1,000 to 3,000 kW—an exponential increase. The sheer scale of EV interconnects is overwhelming utilities, particularly in states like California, where renewable energy integration requires complex load studies to assess grid impact.

For data centers, electrification presents both a challenge and an opportunity. The shift is driving new models of on-site power generation, microgrids, and renewable integration. Operators that can strategically align with these evolving power dynamics will be positioned to secure reliable, cost-effective energy for the future. The global shift toward electric vehicles (EVs) is transforming power demand dynamics across multiple sectors.

Data Centers: The AI Power Squeeze

Data centers have always been synonymous with high energy consumption, driven by the relentless pace of Moore’s law. But AI has escalated that demand to unprecedented levels. AI training centers—dedicated facilities that process large-scale machine learning models—now consume megawatts of power per model run. To put it in perspective, a single AI training cycle can consume as much power as a small town for an entire day.

Moreover, AI is transforming data center power profiles into three critical ways:

1. Increased Density: Traditional data centers averaged 5-10 kW per rack. AI-specific data centers are now exceeding 30-50 kW per rack due to the deployment of GPU and TPU clusters, creating new cooling and power distribution challenges.
2. Peak Demand Spikes: AI model training often occurs in concentrated bursts, creating power surges that strain existing grid infrastructure. Load balancing and energy storage solutions are becoming crucial to mitigating these spikes.
3. Edge AI Deployments: As AI inference moves closer to the edge, micro data centers and modular AI nodes are emerging, each with its own power requirements. These distributed sites may not have the same grid support as hyperscale facilities, increasing the need for localized power generation and battery storage solutions.

To address these challenges, data centers are increasingly exploring ‘Bring Your Own Power’ (BYOP) models—generating power on-site through microgrids, natural gas turbines, renewable assets, or securing direct agreements with local energy providers. This shift not only provides a buffer against grid instability but also position operators to monetize excess power through grid support agreements and demand response programs.

Evolving Skill Sets: As data centers transition from passive energy consumers to active power producers, the operational skill set is evolving rapidly. Navigating this shift requires not only a deep understanding of traditional data center operations but also expertise in advanced power systems, renewable integration, and grid interconnect management. The complexity of today’s power strategies demands a unique blend of skills, bridging the gap between IT infrastructure management and energy engineering.

For operators, the shift means investing in targeted upskilling while also recognizing when to bring in specialized expertise that can bridge the gap between traditional IT operations and advanced power management. Successfully managing this transition requires a strategic approach to workforce development, aligning operational roles with emerging power expertise and integrating external resources when needed.

Those equipped with the knowledge to navigate both IT infrastructure and complex power systems will play a pivotal role in future data center operations. While many teams are already adapting, Tim emphasized that the speed of power strategy evolution may outpace the availability of trained personnel. Those who can effectively integrate power expertise into their workforce will be better positioned to manage emerging challenges, from AI-driven power spikes to localized grid disruptions.

The Bottom Line: Data centers are no longer just tenants on the grid—they are becoming power players themselves. This shift from passive power consumers to active power producers is more than a strategic pivot—it is a fundamental transformation in how data centers operate, manage risk, and generate revenue.

The data center of the future will not just consume power—it will produce it. Those that embrace this shift can capitalize on new revenue streams, including power resale agreements, demand response programs, and grid support services. However, the transition also brings new complexities: managing on-site generation assets, navigating regulatory frameworks, and integrating diverse power sources.

For those who move quickly to adopt power production strategies, the benefits extend beyond energy security. They position themselves as strategic hubs within evolving power ecosystems, setting new benchmarks for resilience, sustainability, and operational excellence. But those who hesitate risk being left behind, tethered to a grid that is increasingly unstable and overburdened.

ABOUT THE ANTARA GROUP:
The ANTARA Group partners with data center, cloud, and digital infrastructure companies to drive growth, transformation, and operational excellence. From strategic M&A and revenue optimization to power resilience and go-to-market execution, we deliver targeted solutions that create immediate impact and lasting value. As power dynamics shift from utility to strategic asset, we help operators navigate the evolving landscape—integrating sustainable energy strategies, microgrid solutions, and power management systems that not only mitigate risk but also unlock new revenue streams.