The New Power Frontier: The 800 VDC Revolution

The Next Power Frontier

Welcome back! Today is one of those newsletters in which I’ve learned just as much as what you’re going to learn yourself. And it also has a huge upside because it’s an article that will set a precedent for you about data centers for the foreseeable future.

Because to allow progress to continue, data centers will undergo a profound repurposing, especially regarding power equipment, the great forgotten bottleneck.

The deadline? As soon as next year.

This implies a huge amount of player and opportunity reshuffling, which means the lamest and most predictable part of the entire AI stack has just become exciting.

I’m going to tackle everything to describe where data centers are headed, the challenges that lie ahead, and the financial opportunities that emerge in the process, including the hottest new market emerging from AI and the company that, as of today, represents my next investment; a company that is equally risky as it has huge upside potential, probably the most out of all the ones I’ve talked about.

Let’s dive in.

Bring me the heat

As you surely know, we use accelerators (e.g., GPUs) to train and serve AI models. But to get those GPUs to do their job, we need a lot more stuff around them: memory, storage, CPUs, interconnect gear, and, of course, all the power-related equipment: VRMs, PSUs, busbars, sidecars, breakers, switchgear, converters, rectifiers, transformers, and many more.

Building a data center is not like building a warehouse; everything is connected. But until now, we were in easy mode, as AI has followed the traditional approach to building data centers.

But for the beasts that are arriving as soon as next year, current data centers are not enough, not even close; we need something else.

But why? Well, absurd amounts of power in very small places.

Power is rising fast

Just five years ago, the state of the art in accelerators was the NVIDIA A100 (the chip that, by the way, gave us the first ChatGPT).

These chips were located in servers in groups of 8, and each server required 6,500 watts at max power, less than what my burger joint’s fryer needs to operate.

This meant that you could house these chips in traditional data centers, which could allow between 5-10kW per rack (a rack is the chassis where the AI server, or other non-AI servers, are housed.

A data center offering 15-20 kW per rack was considered pretty dense at the time, before the AI revolution. However, things have changed.

Today, an NVIDIA GB300 NVL72, the most powerful AI server the world has to offer, can “offer” peaks of 150 kW, more than a tenth of a megawatt.

This has already implied having to build data centers from scratch just to be able to house servers of this size, and led to truly enormous data centers that can draw hundreds of megawatts and, in some cases, gigawatts, in order to house just a few thousand of these servers.

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