Squiz Today Squiz Shortcuts: What are data centres?
Mar 17, 2026
They explain what data centres are and why they have grown with AI demand. The role of GPUs and massive compute clusters is explored. The conversation covers scale, energy and water use, and rising construction costs. They look at local investments, economic effects on towns, and how centres can become strategic or security targets.
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Data Centres Are Warehouse Supercomputers
- Data centres are essentially large warehouses housing vast computing power, increasingly built specifically to train AI models like LLMs.
- Microsoft’s Fairwater site links hundreds of thousands of NVIDIA GPUs to act as one massive AI supercomputer, needing huge space and power.
AI Chips Drive Massive Power And Cost Needs
- AI-focused chips (GPUs) consume far more electricity than regular chips, sometimes up to four times as much.
- Average facility cost was about US$220 million in 2025, while mega campuses like Microsoft's cost far more and require massive capital outlays.
Data Centres Are An AI Arms Race Asset
- Big tech builds huge data centre fleets as a competitive advantage to rent out compute for AI services.
- Companies invest tens of billions (Amazon $100bn, Microsoft $80bn, Meta $65bn) to avoid falling behind in the AI arms race.