Nope. You probably can't cash in by turning your office or farm into a datacenter
(2025/02/27)
- Reference: 1740659288
- News link: https://www.theregister.co.uk/2025/02/27/real_estate_datacenter_conversion/
- Source link:
APRICOT 2025 Sorry to be the bearer of bad news, but if you own real estate and think you can cash in by using it to host an AI datacenter, you're probably wrong.
That's the opinion of Billy Lee Kok Chi, chairman of Malaysian datacenter builder and operator CSF Advisers, as expressed on Wednesday during the closing plenary of the Asia Pacific Regional Internet Conference on Operational Technologies (APRICOT) in Kuala Lumpur.
In his talk, Lee shared the questions he's often asked about the suitability of different facilities to be repurposed as AI datacenters that require 230 kW of available energy per rack. Here's our summary of the types of land he's often asked about, and his assessment of whether they can be used to house a bit barn.
Multi-story commercial building
99 percent likelihood of noncompliance because the floors aren't strong enough to hold fully loaded racks, layout restrictions mean you can't get enough racks inside, and there's insufficient space for mechanical and electrical services that keep datacenters cool and power flowing.
Empty land in a city center
80 percent chance it won't be feasible due to high land and construction costs. Datacenters also don't need to be near customers, so investors won't be keen.
Existing large industrial factory
70 percent likelihood of compliance, because factories allow flexible layouts, robust flooring, and probably have plenty of space for mechanical and electrical services.
A 40-acre-plus (16+ hectares) plot in the suburbs
65 percent chance of success, with timely upgrades to power and data infrastructure the biggest challenges.
200 acres (80 hectares) of land in a rural area
60 percent chance of success, if data connectivity and power are available.
Enterprise datacenter or colocation facility built before 2022
50 percent chance of successful conversion because they're already designed to be datacenters and may have the headroom that allows denser racks and higher power consumption.
Large warehouse or logistics facility
40 percent chance of success as major modifications will be required, and power supply constraints are likely given the facility was designed for less energy-intensive uses.
Land near a power transmission station
In 80 percent of cases you can't get power directly from the transmission station, and may end up having to source it from far away. So it is not a great option.
Rural land next to a power transmission line
50 percent chance of viability depending on whether the passing power line has capacity. If it does, you'll need to build a voltage switchyard to bring juice to a datacenter.
Rural land next door to another property that has a power transmission line running through it
Not viable as the power line would need to cross your neighbor's private land to reach your plot and that won't happen.
Any sort of land in a nation that is fast-tracking datacenter approvals
50 percent chance of success because infrastructure upgrades may not be ready in time to meet demand.
[1]If you dip your toes into immersion cooling, watch out for dielectric liquid sharks
[2]Microsoft's drawback on datacenter investment may signal AI demand concerns
[3]Our world faces 'unprecedented' spike in electricity demand
[4]UK government insiders say AI datacenters may be a pricey white elephant
Lee also pointed out that the next generation of AI datacenters will be enormous and vastly complex.
He said CSF Advisers has been asked to create a design for a gigawatt-scale datacenter, and came up with a plan that will require 634 acres (256 hectares) of land, almost 300 of which are devoted to a solar farm and batteries. Additionally, the facility will need a large voltage switching yard, and a large outdoor reservoir to store all the water needed for cooling.
[5]
Lee also commented on colocating nuclear power plants and new datacenter builds, and said that's not a feasible approach because it takes a decade or more to build a reactor. The investors funding the $50 billion-plus pipeline of datacenter builds he currently sees in Malaysia alone won't wait for nuclear plants to come online. ®
Get our [6]Tech Resources
[1] https://www.theregister.com/2025/02/25/immersion_cooling_dielectric_liquid_market_concentration/
[2] https://www.theregister.com/2025/02/24/does_microsoft_pull_back_on/
[3] https://www.theregister.com/2025/02/14/iea_global_electricity_demand/
[4] https://www.theregister.com/2025/02/12/uk_gov_ai_datacenters/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z8CaN9Prkc4cCAWWXcyTBQAAAYM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[6] https://whitepapers.theregister.com/
That's the opinion of Billy Lee Kok Chi, chairman of Malaysian datacenter builder and operator CSF Advisers, as expressed on Wednesday during the closing plenary of the Asia Pacific Regional Internet Conference on Operational Technologies (APRICOT) in Kuala Lumpur.
In his talk, Lee shared the questions he's often asked about the suitability of different facilities to be repurposed as AI datacenters that require 230 kW of available energy per rack. Here's our summary of the types of land he's often asked about, and his assessment of whether they can be used to house a bit barn.
Multi-story commercial building
99 percent likelihood of noncompliance because the floors aren't strong enough to hold fully loaded racks, layout restrictions mean you can't get enough racks inside, and there's insufficient space for mechanical and electrical services that keep datacenters cool and power flowing.
Empty land in a city center
80 percent chance it won't be feasible due to high land and construction costs. Datacenters also don't need to be near customers, so investors won't be keen.
Existing large industrial factory
70 percent likelihood of compliance, because factories allow flexible layouts, robust flooring, and probably have plenty of space for mechanical and electrical services.
A 40-acre-plus (16+ hectares) plot in the suburbs
65 percent chance of success, with timely upgrades to power and data infrastructure the biggest challenges.
200 acres (80 hectares) of land in a rural area
60 percent chance of success, if data connectivity and power are available.
Enterprise datacenter or colocation facility built before 2022
50 percent chance of successful conversion because they're already designed to be datacenters and may have the headroom that allows denser racks and higher power consumption.
Large warehouse or logistics facility
40 percent chance of success as major modifications will be required, and power supply constraints are likely given the facility was designed for less energy-intensive uses.
Land near a power transmission station
In 80 percent of cases you can't get power directly from the transmission station, and may end up having to source it from far away. So it is not a great option.
Rural land next to a power transmission line
50 percent chance of viability depending on whether the passing power line has capacity. If it does, you'll need to build a voltage switchyard to bring juice to a datacenter.
Rural land next door to another property that has a power transmission line running through it
Not viable as the power line would need to cross your neighbor's private land to reach your plot and that won't happen.
Any sort of land in a nation that is fast-tracking datacenter approvals
50 percent chance of success because infrastructure upgrades may not be ready in time to meet demand.
[1]If you dip your toes into immersion cooling, watch out for dielectric liquid sharks
[2]Microsoft's drawback on datacenter investment may signal AI demand concerns
[3]Our world faces 'unprecedented' spike in electricity demand
[4]UK government insiders say AI datacenters may be a pricey white elephant
Lee also pointed out that the next generation of AI datacenters will be enormous and vastly complex.
He said CSF Advisers has been asked to create a design for a gigawatt-scale datacenter, and came up with a plan that will require 634 acres (256 hectares) of land, almost 300 of which are devoted to a solar farm and batteries. Additionally, the facility will need a large voltage switching yard, and a large outdoor reservoir to store all the water needed for cooling.
[5]
Lee also commented on colocating nuclear power plants and new datacenter builds, and said that's not a feasible approach because it takes a decade or more to build a reactor. The investors funding the $50 billion-plus pipeline of datacenter builds he currently sees in Malaysia alone won't wait for nuclear plants to come online. ®
Get our [6]Tech Resources
[1] https://www.theregister.com/2025/02/25/immersion_cooling_dielectric_liquid_market_concentration/
[2] https://www.theregister.com/2025/02/24/does_microsoft_pull_back_on/
[3] https://www.theregister.com/2025/02/14/iea_global_electricity_demand/
[4] https://www.theregister.com/2025/02/12/uk_gov_ai_datacenters/
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z8CaN9Prkc4cCAWWXcyTBQAAAYM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[6] https://whitepapers.theregister.com/
"gigawatt-scale datacenter .... will require 634 acres (256 hectares) of land"
Bebu sa Ware
One thing I remember from the peculiar units† rote learnt during my long ago £/s/d schooldays is that there were 640 acres in a square mile. (2.56 square km or 1.6 km × 1.6 km)
The idea that this AI madness is going to consume 365.25x24 GWh‡ of energy every year and cover a square mile of probably otherwise quite productive land is insane and all just so some corporate, utility or government instrumentality can have an AI agent which will give you the same pre AI runaround.
† rod (aka pole or perch), chain, furlong; perch, rood, acre but mercifully no hides.
‡ I guess enough energy to heat 75 Mt of water 100°C.
Re: "gigawatt-scale datacenter .... will require 634 acres (256 hectares) of land"
Yet Another Anonymous coward
We could always build them on golf courses = no loss of useful or productive land.
Those days are long gone
ecofeco
The days when you could put a rack of Cobalts in your garage and stick A/C in the window and sell hosting, are long gone. By decades.
Re: Those days are long gone
Yet Another Anonymous coward
But with AI you can now generate images of your proposed new AI datacenter using the computer in your garage
"the next generation of AI datacenters will be enormous and vastly complex"
Given the reports that Microsoft are holding back on some of their options it's a possibility that the bubble might start to shrink next, or maybe burst entirely. There might not be a new generation.