“Canada is uniquely positioned to be a global leader in AI data centres, thanks to its abundant renewable energy resources, advanced tech ecosystem, and commitment to sustainable innovation. The fusion of cutting-edge AI with environmentally responsible infrastructure makes Canada a hub for the future of intelligent computing.” – MJ Martin
Data centres have now been around for several decades, they are not new in the classic sense. A data centre is a facility that houses an organization’s IT infrastructure, including servers, storage systems, networking equipment, and other computing resources, to store, process, and distribute data and applications.
The data centre serves as the backbone of modern digital operations, supporting businesses, governments, and other entities. Key components of a data centre include servers for computing tasks, storage systems for data retention, networking equipment for connectivity, cooling systems to maintain optimal temperatures, and robust power supplies to ensure continuous operation.
Security measures, both physical and digital, protect the data and hardware, while monitoring tools manage performance and resources efficiently. Data centres come in various types, such as enterprise facilities owned by individual organizations, colocation centres shared by multiple users, cloud data centres operated by providers like AWS or Microsoft Azure, and edge centres located near end users to reduce latency.
In essence, a data centre is the nerve centre of modern digital infrastructure, powering everything from simple web browsing to complex AI applications and global financial systems.
Types of Data Centres:
- Enterprise Data Centres: Owned and operated by individual organizations for their specific needs.
- Colocation Data Centres: Facilities where multiple organizations share resources and rent space.
- Cloud Data Centres: Operated by cloud service providers like IBM, AWS, Google Cloud, and Microsoft Azure, offering virtualized services.
- Edge Data Centres: Smaller facilities located closer to end users to reduce latency and improve performance.
They play a critical role in storing digital information securely, running applications, enabling seamless networking, and ensuring data backup and recovery, making them indispensable in the digital age.
Now in 2025, we are seeing a major shift in data centres. The advent of a data centre designed and built specifically for artificial intelligence (AI) use cases is now emerging. It is a colossal trend that is dramatically shifting the size and scale of data centres worldwide.
AI data centres differ from traditional data centres in their ability to handle the intensive computational demands of artificial intelligence workloads. These facilities are equipped with specialized hardware, such as GPUs (Graphic Processing Units) and TPUs (Tensor Processing Unit), which are far more powerful than the CPUs (Central Processing Units) typically used in classic data centres. They feature advanced network architectures designed for high-speed data transfer and low latency, enabling efficient parallel processing required for training large AI models.
AI data centres also consume significantly more power and use innovative cooling solutions like liquid or immersion cooling to manage heat from dense computational operations. They are purpose-built to process and store massive volumes of data and often employ AI-driven optimization techniques to enhance energy efficiency and predict maintenance needs. Additionally, these centres prioritize sustainability by integrating renewable energy sources and heat recovery systems.
Unlike traditional data centres, AI facilities are designed for scalability, supporting the rapid growth of AI technologies and incorporating edge computing capabilities to reduce latency for real-time applications. These differences make AI data centres highly specialized and critical for advancing artificial intelligence.
AI Data Centres
The rapid advancement of artificial intelligence (AI) has led to the development of specialized data centres designed to handle the substantial computational demands of AI workloads.
Key Players and Their Investments:
- Microsoft: In fiscal year 2025, Microsoft plans to invest approximately $80 billion in AI-enabled data centres, with over half of this investment allocated to the United States. This initiative aims to enhance the infrastructure necessary for training AI models and deploying AI and cloud-based applications.
- Google: Google has been expanding its global network of data centres to support AI operations, with facilities in locations such as The Dalles, Oregon; Atlanta, Georgia; and international sites in the Netherlands and Belgium.
- Meta (Facebook): Meta is exploring innovative solutions to meet AI’s energy demands, including the use of nuclear reactors to power their data centres.
Notable Data Centre Locations:
- Canada: eStruxture Data Centres, will develop its largest facility in Alberta. Expected to power up by fall 2026, eStruxture’s new $750-million, 90 megawatts (MW) operation, located near Calgary, will be the Montreal-based company’s third data centre in the area. The seven-year-old firm owns 12 other data centres in the larger industry markets of Montreal, Toronto and Vancouver.
- United States: Significant data centres are located in Northern Virginia, a major hub for AI data centres, as well as in Iowa, where Microsoft’s facilities employ over 300 residents.
- International: Regions such as Johor, Malaysia, are emerging as major hubs for data centres due to the growing demand for AI technology infrastructure.
Canada’s AI Data Centre Ambitions
eStructure
Until recently, nearly all Canada’s 239 data centres – including 22 in Alberta – each delivered less than 20 MW of power, making eStruxture’s new 90-MW data centre, dubbed CAL-3, one of the country’s most powerful. Once fully built, CAL-3 will contribute to eStruxture’s total 125 MW in data centre capacity in the Calgary area – enough to power about 100,000 homes or the entire city of Thunder Bay.
“CAL-3 strengthens our commitment to fuelling the province’s digital economy,” Todd Coleman, president and chief executive officer of eStruxture Data Centers says. “We are super-addicted to data, and it’s just multiplying.”
Mr. Coleman says AI data centres are somewhat “geographically agnostic,” with some key site requirements being high-speed internet, land, and loads of “dependable power” to avoid potentially catastrophic data-processing failures related to health, finance, telecommunications, transportation, manufacturing and more. He acknowledges that Alberta offers a strong competitive advantage when it comes to its available land, fibre-optic connectivity, and strong and reliable power capacity.
Beacon
While the exact details for the AI Data Centre plans for Beacon Data Centres are largely still unknown, there is a lot of activity underway to develop multiple AI data centres in Alberta.
The Calgary Herald reports the Alberta Electric System Operator (AESO) has at least six data centre applications in the early stages of development that would use about 3GW of power. Five of those AI hubs have reportedly been submitted by Calgary-based Beacon Data Centres Inc. Beacon is a new data centre firm is planning several data centre campuses in Alberta, Canada.
Okotoks Online reports Stantec is applying, on behalf of Beacon Data Centres, to re-designate land within the Foothills Crossing Area Structure Plan from an Agriculture District designation to a Business Park District for a planned data centre.
Cohere
Toronto-based generative artificial intelligence (AI) startup Cohere plans to build a multi-billion-dollar AI data centre in Canada with the support of the federal government.
The feds have committed up to $240 million CAD towards the effort. This marks the government’s first investment through its recently unveiled $2-billion Canadian Sovereign AI Compute Strategy, which is aimed at ensuring the country’s AI sector has access to the infrastructure it needs. The strategy includes $700 million to finance the construction and expansion of commercial AI data centres in Canada.
The Government of Canada said that Cohere’s new facility, which is expected to come online in 2025, will provide computing power to Cohere and other Canadian technology companies.
BetaKit has confirmed with Cohere that the company is partnering with American cloud computing firm CoreWeave to build this facility. Its exact location has yet to be determined, and no further financial details have been released at this time.
Earlier this year, Cohere closed $500-million USD in Series D financing at a $5.5-billion valuation, making it one of Canada’s most valuable tech startups. Cohere’s backers include PSP Investments, Cisco, AMD, Export Development Canada, Fujitsu, Nvidia, Salesforce Ventures, and Oracle, among others.
This government investment is designed to help Cohere draw in additional private capital to support this project, in which Cohere is also expected to make a significant investment.
Canadian Federal Government Investment
Compute is the technology that powers artificial intelligence (AI). It’s the chips and the data centres, the backbone of this transformative new technology. Access to cutting-edge compute infrastructure is crucial for securing Canada’s AI advantage, empowering researchers and industries to thrive.
On December 5, 2024, the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, officially launched the Canadian Sovereign AI Compute Strategy. The Strategy will invest up to $2 billion, as previously announced in Budget 2024, to meet three key objectives:
- Up to $700 million to grow Canadian AI champions by leveraging investments in new or expanded data centres through the AI Compute Challenge that is launching today
- Up to $1 billion to build transformational public computing infrastructure
- Up to $300 million to provide affordable access to compute power for small and medium-sized enterprises (SMEs) through the AI Compute Access Fund
This strategy will ensure that Canadian businesses, innovators, and researchers have access to the compute capacity they need to develop made-in-Canada AI products and drive frontier research.
Developing cutting-edge AI solutions across all sectors of our economy helps Canada remain a destination of choice for investment and top talent. That’s why Canada is committed to building a strong and secure AI compute capacity to fuel the economy of the future.
Power Consumption
Canada’s data centres use 1 per cent of the country’s energy, according to Natural Resources Canada. However, if all 20 to 30 proposed data centres in Canada are approved, they are expected to account for 14 per cent of the country’s power usage by 2030, with Alberta’s 12 proposals using nearly half of it, the Royal Bank of Canada’s Climate Action Institute says.
AC power consumption in data centres is a critical factor, as these facilities are among the most energy-intensive, consuming between 1% and 3% of global electricity. A large portion of this energy, often 30% to 50%, is used for cooling systems to maintain optimal temperatures for servers and networking equipment.
Additionally, the conversion of AC power from the grid to DC power for IT equipment results in energy losses of 5% to 15%. To measure efficiency, data centres use Power Usage Effectiveness (PUE), with many facilities averaging a PUE of 1.2 to 1.5, reflecting energy lost to non-IT functions like cooling.
AI-focused data centres amplify these challenges, as they consume 3 to 5 times more energy than traditional facilities due to their demanding workloads. To mitigate environmental impacts, many data centres are integrating renewable energy sources, such as solar, wind, and hydroelectric power, and adopting innovative cooling and power management technologies. These measures are essential as global demand for digital services and AI continues to rise.
One interesting and innovative example of sourcing green power for its data centres saw Microsoft enter into a 20-year agreement with Constellation Energy to purchase power from the planned restart of Unit 1 at the Three Mile Island nuclear facility in Pennsylvania. This initiative aims to provide carbon-free energy to support Microsoft’s expanding AI data centres. Constellation Energy plans to invest $1.6 billion to upgrade the facility, with operations expected to resume in 2028, pending regulatory approval.
The Three Mile Island facility is notable for the 1979 incident at its Unit 2 reactor, which experienced a partial meltdown. Unit 1, however, remained operational until 2019, when it was shut down due to economic factors. The planned reopening of Unit 1, to be renamed the Crane Clean Energy Center, reflects a growing trend among tech companies to invest in nuclear energy as a means to meet the substantial power demands of AI technologies while adhering to sustainability goals.
Conclusion
AI data centres represent a significant evolution from traditional data centres, designed to meet the unique demands of artificial intelligence. They feature specialized hardware, advanced networking, and innovative cooling systems to handle the immense computational power and data requirements of AI workloads. By integrating AI-driven optimizations and renewable energy solutions, these facilities address the growing need for efficiency and sustainability. Their scalability and focus on edge computing ensure they are prepared for the rapid advancements in AI technologies. As the backbone of modern AI, these data centres are pivotal in supporting the continued growth and impact of artificial intelligence across industries.
Will Canada lead or follow the innovative trend towards AI data centres? Time will tell. But, at least the industry and the governments are making the efforts to place a stake in the AI Data Centre industry, which is a good thing.
References:
Chui, D. (2024). Three Mile Island, Site of Worst Nuclear Accident in U.S. History, Plans to Reopen Under New Microsoft Deal. People / DotDash Meredith Publishing. Retrieved on January 6, 2025 from, https://people.com/three-mile-island-plans-reopen-microsoft-deal-8716002?utm_source=chatgpt.com
Lanthier, N. (2024). New data centre will be one of Canada’s most powerful. The Globe and Mail Newspaper. Retrieved on January 6, 2025 from, https://www.theglobeandmail.com/business/industry-news/property-report/article-new-data-centre-will-be-one-of-canadas-most-powerful/
Scott, J. (2024). Cohere secures federal backing to build multibillion-dollar Canadian AI data centre. Betakit Incorporated. Retrieved on January 6, 2025 from, https://betakit.com/cohere-secures-federal-backing-to-build-multibillion-dollar-canadian-ai-data-centre/
Swinhoe, D. (2024). New company plans data center campuses totaling 1.2GW in Alberta, Canada. Data Centre Dynamics Ltd. Retrieved on January 6, 2025 from, https://www.datacenterdynamics.com/en/news/new-company-plans-data-center-campuses-totaling-12gw-in-alberta-canada/
Unknown. (2024). Canada to drive billions in investments to build domestic AI compute capacity at home. Government of Canada, Retrieved on January 6, 2025 from, https://www.canada.ca/en/innovation-science-economic-development/news/2024/12/canada-to-drive-billions-in-investments-to-build-domestic-ai-compute-capacity-at-home.html
About the Author:
Michael Martin is the Vice President of Technology with Metercor Inc., a Smart Meter, IoT, and Smart City systems integrator based in Canada. He has more than 40 years of experience in systems design for applications that use broadband networks, optical fibre, wireless, and digital communications technologies. He is a business and technology consultant. He was a senior executive consultant for 15 years with IBM, where he worked in the GBS Global Center of Competency for Energy and Utilities and the GTS Global Center of Excellence for Energy and Utilities. He is a founding partner and President of MICAN Communications and before that was President of Comlink Systems Limited and Ensat Broadcast Services, Inc., both divisions of Cygnal Technologies Corporation (CYN: TSX).
Martin served on the Board of Directors for TeraGo Inc (TGO: TSX) and on the Board of Directors for Avante Logixx Inc. (XX: TSX.V). He has served as a Member, SCC ISO-IEC JTC 1/SC-41 – Internet of Things and related technologies, ISO – International Organization for Standardization, and as a member of the NIST SP 500-325 Fog Computing Conceptual Model, National Institute of Standards and Technology. He served on the Board of Governors of the University of Ontario Institute of Technology (UOIT) [now Ontario Tech University] and on the Board of Advisers of five different Colleges in Ontario – Centennial College, Humber College, George Brown College, Durham College, Ryerson Polytechnic University [now Toronto Metropolitan University]. For 16 years he served on the Board of the Society of Motion Picture and Television Engineers (SMPTE), Toronto Section.
He holds three master’s degrees, in business (MBA), communication (MA), and education (MEd). As well, he has three undergraduate diplomas and seven certifications in business, computer programming, internetworking, project management, media, photography, and communication technology. He has completed over 50 next generation MOOC (Massive Open Online Courses) continuous education in a wide variety of topics, including: Economics, Python Programming, Internet of Things, Cloud, Artificial Intelligence and Cognitive systems, Blockchain, Agile, Big Data, Design Thinking, Security, Indigenous Canada awareness, and more.