Google, Equinix Leaders on AI Data Center Demand in Asia

[00:00:00] Speaker 1: Hey folks. Wasn't that great, Ishika and Colin? That was a really nice panel right there. I really enjoyed that discussion. Hi, I'm Stephen Stapchinski. I lead Bloomberg's Asia News coverage for energy. This is a very exciting panel today. We're going to be discussing AI and how that drives global, both energy demand, but also how it changes, how we look at reaching really ambitious, clean goals. Now, with me, I have Li Mei Long. She's the Managing Director for Southeast Asia for Equinix Singapore. Singapore. Singapore. For Singapore. And we have Giorgio Fortunato, Head of Clean Energy and Power at Google Asia Pacific. Thank you for having us. Thank you both for being here with us today. Let's start with you, Mae. I'm really curious. You're in the section of the AI, really in the center of the AI industry, both in terms of the needs for data centers and how the world is going to be viewing how the AI boom and more requirements for data center changes and shapes energy demand going forward. Yes. Now, what have you seen change over the last few years in terms of not just what you're asking from your suppliers of energy, but also how the industry is looking at how AI is driving energy demand going forward? [00:01:25] Speaker 2: Yes. So, thank you very much for the opportunity to be here today. You know, Equinix is the world's digital infrastructure, and we have over 250 data centers across the world. You know, I think we clearly have been in business for over 25 years, and we started because Equinix really stands for Equality, Internet Neutrality, Internet Exchange. Now, however, you know, this, so we've always talked about digitalization, digital transformation, and that's kind of taken its path, you know, and, you know, you've had the dot-com era, and then you had the clouds, the online trading systems coming online, and then you had the clouds, and then now clearly you have AI right in front of us, right? So, that's been a gradual adoption of digital across enterprises and companies coming online virtually, and, you know, and the cloud clearly is where the, is housed in the data center, right? So, you've had the retail, wholesale, and the hyperscalers. However, with AI, it's kind of just pushed that whole demand from what was a gradual to a hockey stick, and because of that, you know, there's been a lot of investments that have gone behind building these huge data centers. So, you know, in the last 18 months, we have seen grids around the world come to a halt, because this demand clearly just was taken off the charts, and, you know, the grids can't cater to that amount of energy. So, you know, digital is clearly going to continue. AI has clearly accelerated that growth for data center space, and because of that, powers have moved from megawatts to gigawatts, and that will continue, I believe, for a couple of years. But, you know, I think it will come down, because there's so much capacity that's building right now, you know, and the power, you know, in many countries have actually completely stopped. You know, Singapore basically called for Monitorium three and a half years ago, right. And it was because the grids were equally full, and equally, it was because it was to really contain carbon emissions, and ensuring that Singapore meets its [00:04:16] Speaker 1: net zero plans. I want to just pull up a chart now, because I think this is a good segue. We have a chart here, AI drives a quadrupling of data center power demand in 10 years. Now, this is from our colleagues at Bloomberg NEF. But what I find really striking about this is the breakup of where we're seeing the demand growth. I mean, clearly, the United States and China are a big part of this. But Southeast Asia is, you know, a sliver at this moment. I mean, what's your take on that? Do you think that - is that because of what what we're talking about where it doesn't have the capacity to really add a lot? Or is there not much [00:04:55] Speaker 2: demand here for the for the data centers in general? No, absolutely not. I think Southeast Asia is is really growing in demand. And if you look at the ASEAN growth basin, right, there's going to be so much more demand with all this digital first entrance. And and that's just going to grow. But you know, I think the the capacity demand, as Colin has mentioned earlier, you know, that that needs to put in place. That takes time, right? You know, infrastructure takes time. Yeah, so that does definitely demand. [00:05:28] Speaker 1: Thank you. And let's let's jump over to Georgia real quick. Thank you for joining me today. I think, you know, when you look at what we've just talked about, and we're looking at this demand growth, there's also the question of how do we achieve meeting the energy needs while also meeting our green goals. Google has some of the most ambitious green goals in the industry. Does this huge increase in energy demand put any of that at risk? Or how are you kind of getting around those issues and those [00:05:58] Speaker 3: bottlenecks? Thank you, Steven. This is a really good question. Look, AI is one of the most transformative technologies in the world today. And our goal at Google is to help as many people as possible access this technology and benefit from the deployment of AI. Now, this is why the energy transition and the economic development are so strongly interlinked today. In order for us to realize that, we need energy. So we have witnessed, as you mentioned, an increase in our energy demand over the past few years. Only last year, our energy demand has increased by 27%. Is this globally? Globally. 27%. But now, what is the good news here? The good news is that at the same time, the emissions from our data center energy has gone down by 12%. So it's a really good news because we're proving that it is possible to increase our energy demand, but at the same time decrease our emissions. One is going up by 27%. The other one is going down by 12%. And let me just share how we are achieving this two main pillars. The first one, energy efficiency. We are striving to build the world's most efficient infrastructure. And compared to only five years ago, today, we can deliver six times more compute power with the same amount of energy, not 6% more, six times more. So this is a massive gains that we are [00:07:36] Speaker 1: witnessing in the energy efficiency field. Sorry, I'm just to follow a question to that. That's really interesting. And do you think that some of the hype around the massive energy requirements for AI is somewhat overblown because of these efficiency gains? I wouldn't know if I would put it that way, [00:07:58] Speaker 3: but definitely what is true is that energy efficiency over the past 20 years has offset the demand for electricity on the electricity grids. And today, electricity grids all over the world need to adjust and modernize and adapt to this new wave of demand. So this is really what we're seeing. [00:08:18] Speaker 1: That's interesting. I mean, from Equinix's point of view, have you seen those similar sort of [00:08:22] Speaker 2: efficiency gains with your facility? Most definitely. We have targets set every year to reduce, I mean, improve our energy efficiency by at least 10%. So, you know, over the last five years, we've improved that massively. And to George's point, you know, we've used more, but we've equally been more efficient. So and over time as well, technology is improving. We are also deploying AI sensors in our data center to monitor use, so that we calibrate the operations to ensure that we're even more efficient. And there are also IT equipment now that's coming out that's more efficient. And we are also adopting the A1A standard, where, you know, we are increasing the temperatures of data center from what used to be 22 degrees right up to 32 degrees. So now, obviously, you can't jump from 22 to 32. But, you know, gradually over time, you know, with everything that we are doing, we definitely are squeezing more out of every megawatt that we use. [00:09:30] Speaker 1: I mean, that's, that's really fascinating. And using even using AI to increase your efficiencies. I mean, are we getting to the point where we're going to see AI manage this as well? One thing that I always think about is, wouldn't AI be a great agent for the grid, right? You could you can manage demand response. Are we seeing that as well in data centers? Are you beginning to implement that? Or is it still too early? [00:09:51] Speaker 2: I think it's still too early right now. You know, but you know, the future with AI and robotics, it's anything is possible, you know. That's, that's a great way to look at it. I'm very excited. [00:10:06] Speaker 1: Now, I want to just take a quick step into the world of politics very, very quickly. With, with Donald Trump being elected in the United States, there has been, to some degree, a de-emphasis on ESG, at least within the US administration. You know, are we seeing, Giorgio, any sort of step back at Google when it comes to [00:10:29] Speaker 3: their ambitions to reduce emissions? Well, I think our targets are there, 24/7 carbon-free energy. We are, we are working towards meeting our energy demand every hour of every day with clean energy. It's no different in Asia. And here we are encouraged by a lot of the development that is happening around clean technologies and around regulations. Look, just a few years ago, it wasn't possible to sign clean energy power purchase agreements in many of the markets in APAC. And I was in India last week, and the, the levelized cost of electricity for solar is actually already below the cheapest alternative. So, you know, and that is the way we can make sustainability sustainable and growing further. So I think our focus is really to understand what are the technologies that are part of our portfolio for the future and scaling those technologies so that we can meet our demand with clean energy. [00:11:31] Speaker 1: I'll, I'll get to those technologies in a minute, but I just want to, again, focus, you know, Southeast Asia, um, are you able to, because as you said, there are some countries that you still can't get power purchase agreements. How does that affect your, your, your targets, your green targets? If you're not able to secure the energy, does that risk putting off your green goals? [00:11:52] Speaker 3: It's an opportunity to bring that investment into the market and to work together with many of the stakeholders, whether it is developers, uh, financiers, government, to actually make that transition happen faster and in the most effective way. And I mean, yes, uh, saying that, uh, of course, [00:12:12] Speaker 1: that's what we want, but in reality, are you seeing any difficulties doing that? [00:12:17] Speaker 3: Oh yeah. It's, it's challenging. Of course, it's, uh, we acknowledge the, uh, the challenge of doing that. Look, uh, across APAC, uh, we've been working to tailor solutions to the different markets where we operate. These markets are all different to each other. Right. Um, when you look at Japan, for example, there's not a lot of space to, uh, to develop, uh, uh, utility scale solar. So what we have done is we have aggregated the supply from very small projects to supply for our data center in inside 40 megawatts. In Taiwan, the problem is the lack of supply. There's not enough supply. So we have made a capital investment to accelerate and develop a one gigawatt pipeline of solar projects. That's a massive amount of power. Um, and together with that, we have invested in offshore wind and we have invested in geothermal. So we are, uh, looking at, okay, what else can be done in the different markets where we operate? Australia and India are the good example. These are cloud regions for us. So we've worked with partners to, uh, create innovative structures, contracting structures that allow them to go out and procure clean energy on our behalf. Um, it's a mix of wind and solar, for example, in India, where we have this hybrid project. So it's really like tailoring the solutions to all the different unique, uh, circumstances of the market where we operate. That's how we are approaching. That's a fun [00:13:42] Speaker 1: job, isn't it? That sounds really exciting. Um, now I just want to open this up to the audience real quick for, for a quick question. I think we're going to throw it up, uh, here. Um, you can use this QR code, I think to, to vote, uh, very quickly. Um, what will most shape Asia's energy mix as AI expands? We gave you, uh, four potential answers. AI-driven efficiency gains, data center energy demand, policy and energy security needs, as well as investment in renewables. Now, Yimei, let's, I'm just going to pose that to you. What do you think? How would you answer this question here? [00:14:17] Speaker 2: Um, you know, I think, um, Asia's energy mix as it demands, uh, you know, clearly, uh, if I look at ASEAN and Singapore's been, been really pushing the envelope on this front. Yeah. Um, you know, solar is clearly the obvious one. Um, but, uh, you know, hydrogen is been talked about, but the reality of it happening is, uh, still a long way. Um, you know, and clearly then there's, there's gas, LNG gas and CCS, uh, carbon capture. And, uh, you know, recently, Singapore's just also launched the, um, um, CFA two and, uh, you know, in, and for the green energy transition options that we're looking at, it's really, uh, ammonia, the ammonia pilot that Singapore wants to, to run as well as bioenergy. Um, you know, so I think all this is also going to spur a lot of activity in the region. And then clearly, Singapore's also talking about, uh, solar imports, you know, so that, that's going to create investments in the other countries that will start by exporting, but then at the end of the day, they will also start using. So, you know, I think these are all the, the possible scenarios. And of course, there's, there's, there's SMR, uh, you know, from an Equinix point of view, uh, we have invested in Oclo, uh, 500 megawatts, you know, that would be advanced fission technology. Uh, clearly, you know, countries need to ensure that risks are mitigated, but that's one of the cleanest, uh, sources of energy. [00:15:58] Speaker 1: But when we talk about nuclear SMR for use in South or Singapore in Southeast Asia, is that what you're talking about? Yes. And, and what's the timeframe? I mean, this is probably not a 2030 sort of thing, [00:16:09] Speaker 2: right? No, I think, I think there's hope that within the next eight to 10 years that can happen because there's so much work that's being done in Singapore now to, to talk about how you do risk. Right. Right. Uh, and, and how to, to then implement it safely. I mean, do you think that [00:16:28] Speaker 1: these projects require big corporations to sign PPAs and things like that to support? I mean, you saw what happened with Three Mile Island, Three Mile Island, um, uh, received a, a giant power purchase agreement from Microsoft. Yes. Um, and, and that, that was, that was big news and that helped, you know, that was, that helps fund their, that retrofit there. Yes. Should we be seeing tech companies in this region step up and do this as well? I think government regulations will help drive [00:16:57] Speaker 2: some of that. Yeah. Uh, you know, and I, like I said, the Singapore government is definitely pushing the envelope on that. So it's like, you know what, if you want data center capacity in Singapore, you have to be green. So, you know, that, that kind of pushes, um, enterprises to start, uh, really, uh, being more responsible. But from an Equinix point of view, uh, you know, we've always adopted a, a future first strategy since 2015 and we are really already 96% renewable around the world. Oh, wow. That's, [00:17:29] Speaker 1: uh, that's an impressive figure there. I want to go to this poll very quickly. Uh, we got the figures up here. You can read it behind me. It looks like the folks in the audience care, say that it's data center energy demand, uh, that will shape Asia's mix as a expands and also policy and energy security needs. Clearly we just talked about policy, um, right now. Now, you know, we just started a, a, a small discussion on SMR and, and nuclear. George, I want to throw it over to you. I know that there are a lot of different, so I'm going to clump SMR and advanced energy, um, technologies. And I know Google is very much looking at a wide spectrum in Asia. What do you think makes sense? Does, does, does SMRs make sense in, in Southeast Asia for you folks, or what are you looking at? That's true, Steven. It really ties into the [00:18:17] Speaker 3: broader perspective of different technologies. And, um, we're working on a portfolio, um, on a broad portfolio, as broad as possible of different technologies, because that's the fastest and the most effective way to decarbonize the grids where we operate. Um, and let me explain. We have, of course, mature, renewable energy technologies. We have wind, we have solar. These technologies, especially when you look at Asia, uh, we believe that there is still a lot of untapped potential. These technologies can be maximized further. Um, but see, like the wind is not blowing every time. The sun is not shining every time, right? So we also need, um, energy storage. We need a portfolio of advanced clean technologies, firm technologies that can complement the gaps in generation. And, and that is how we can achieve the 24/7 profile we talked about before. Um, in Asia in particular, we see geothermal. Uh, we have invested in geothermal in Taiwan where we have investment and offtake agreement. Um, of course, it's, uh, it's more than the initial capacity. It's, uh, about planting a seed, sending a signal and to support these technologies, which meet a lot of obstacles, especially at the beginning in order to scale to commercial operations. Um, we have done something with biomass as well here in Singapore, where we use the waste wood, uh, from, uh, the logistics industry and from the horticultural, uh, waste to actually provide, uh, clean energy for our operations in Singapore. So, you know, the mix of the two advanced clean technologies and, and traditional renewable energy technologies, um, will be what we are working towards. Look, if we do this right, we will be able to, first of all, um, decarbonize the grids where we operate faster and most effectively. And second, rely on fossil fuels for less than, um, than, uh, than we need. So that's, that's the, that's how it fits [00:20:15] Speaker 1: into this picture. Yes. And I guess, you know, when you look at, I'm trying to just understand, uh, for, for Google and for your operations, where are the, the more challenging regions? Is, is Asia among the [00:20:29] Speaker 3: most challenging region to decarbonize? It's absolutely one of the most challenging, uh, parts of the world, especially certain markets. And I also would like to say Asia is, is a very broad. Of course. Yeah. Right. So, so we have markets, uh, where it's easier to procure clean energy, where it's most cost effective. We are markets where the regulatory frameworks, the current regulatory frameworks are still, uh, you know, need still to, to, to mature. And so, so, I mean, let, let's get into it. Like which, [00:20:57] Speaker 1: which ones do you think are the challenging ones that do need to kind of push the envelope? Yeah. Um, look, [00:21:03] Speaker 3: I think Taiwan, um, has been a challenging one for what I mentioned before on the lack of supply Yeah. Available. And so, and so this is why, you know, we have the demand response going on. We have the offshore wind, we have the geothermal, we have solar. Right. And our role has really evolved from, uh, from being an off taker. Right. To being, uh, uh, technology catalyzer. Right. Yeah. To invest in, in new projects. Um, you know, there's, there's an entire spectrum of things that we're doing today that, you know, maybe we weren't doing in our traditional role as a, as an energy buyer, as an energy off taker. Um, and so I think that's really an inspiring part of what we're doing. Yeah. And, and to add to that, [00:21:45] Speaker 2: Georgia, don't you agree that at the end of it is, is really demand and supply, right? As the demand increases. Yeah. The, the supply will happen. You know, like right now in some of these markets, it's very expensive. That's the other thing. So it's a little bit prohibitive. Um, but you know, I think companies are stepping up, uh, for the ESG goals. I, I don't think, um, the companies have committed, have not done that, have not, uh, decreased it despite, uh, the current administration. You know, so I, I am optimistic. I mean, I, I sure hope that, uh, as the keynote speaker said this month, uh, just now, uh, by 2025, we actually start decline. I think that would be the, the light at the end of the tunnel we all see, right? Given all the, the, the decisions that we've taken in the, the last couple of years and focus on sustainability. I mean, I think we've talked a lot in the last, [00:22:42] Speaker 1: you know, 20 minutes about, you know, what, what companies are doing, kind of pushing the envelope. Are we in a place where you are seeing, I mean, obviously in the last five years, we have seen companies step up, sign PPAs, under, you know, underpin technology. Are, are, when are we going to get to the point, at least in Southeast Asia, where these, these companies with their green goals are in the driver's seat, and it's not something that, you know, we have to depend so much on policy and, and government, or does it never go that way? Is it more, you have to go hand in hand in this [00:23:09] Speaker 2: entire kind of, kind of road? I would say it has to go hand in hand. I, I think, uh, from, for Aquinix, we have made a commitment to be net zero. Um, you know, and, and clearly, government regulation will help that enforcement that across the sector equally, everybody comes to join the party. And if all of us do, um, you know, the, the energy, uh, green energy transition options will be made more available. So, you know, that, that demand increases and that supply increases, [00:23:43] Speaker 3: and everybody wins. How do you feel about that? It definitely has to go hand in hand. Yeah. Um, we are working hand in hand with government, with developers, but also with peers, with our partners. Um, there's, we are a founding member of Asia Clean Energy Coalition that is working to, uh, improve the, the energy, uh, to create more conducive environments for clean energy. Um, we work with the semi energy collaborative, we work with CBA. Um, and, and so like, I think it's really bringing that opportunity and realizing that as the energy demand keeps growing, energy efficiency and clean energy will be the key enabler for, uh, to deliver, uh, the AI value. And so working hand in hand with governments to realize that. And you still, I mean, kind of going back on your point, [00:24:32] Speaker 1: you still think there are a lot of low hanging fruit in terms of deploying just traditional solar and wind. Absolutely. Yes, absolutely. Even in a place like Singapore, there's still more potential [00:24:42] Speaker 2: to maximize that. Well, in Singapore is a bit tight. Right. You know, I mean, there's only so many rooftops we can kind of plaster solar panels on, right, which is why Singapore is taking that creative long vision, uh, outlook on, on looking at other energy options. And also importing, right? I think you mentioned importing. Yes, and also importing. And you know, don't forget, right? I, I think, uh, the other one that is, is nearby is the Sarawak, uh, hydro opportunity, uh, which, uh, the government, Singapore government has also been talking a lot to. Yeah. So in a way, I mean, do you see Singapore, [00:25:16] Speaker 1: at least in the region as, as a leader of pushing this forward? Absolutely. Yeah. You know, [00:25:21] Speaker 2: I think Singapore's intent is to play a lead role for the ASEAN market, uh, you know, and, uh, and, and, and clearly simple has interests, uh, uh, because our resources here are tight, but you know, I think Singapore wins and the region wins.