The Stargate joint venture, valued at $100 billion, is set to shake up the artificial intelligence industry by leveraging solar and battery power for its operations. The ambitious project is a collaboration between OpenAI, Oracle, and SoftBank Group, to establish a network of data centres dedicated to advancing AI applications.
SoftBank-backed SB Energy will be responsible for constructing the renewable energy installations, although solar and batteries are not expected to be the sole energy sources for the venture. The integration of renewable energy aligns with the growing need for sustainable power solutions in the tech industry.
The rapid expansion of cloud computing and AI has created a significant demand for energy, prompting tech companies to explore various power options. According to the U.S. Department of Energy, data centres may consume up to 12% of the total U.S. power output by 2028, marking a substantial increase from 4.4% in 2023. This surge could lead to underpowering issues for new data centres by 2027.
Nuclear energy has gained popularity among data centre developers, with notable deals such as Google’s partnership with Kairos and Microsoft’s revival of a reactor at Three Mile Island. However, nuclear projects have historically faced cost overruns and delays. Recent startups aim to address these issues through modular reactor designs, but commercial reactors are not expected to be operational until 2030, offering little relief for the immediate energy shortfall.
In contrast to nuclear and natural gas plants, solar and wind farms can be deployed much faster. Studies indicate that solar power plants can be completed in approximately 18 months, thanks to their modular design, which allows them to generate power even before full project completion.
The primary challenge lies in the permitting and grid connection processes, which can be expedited for data centres that opt for direct power usage, making solar a likely choice for initial data centres.