In the late 1880s, a tragic accident in lower Manhattan led to a full-blown electric wire panic. Two Western Union linemen, John Feeks and his coworker, climbed a pole to cut down dead electrical wires. Feeks fell from the pole, came into contact with an electric wire, and died. The incident sparked public fury, with building owners cutting wires above their rooftops and newspapers demanding accountability.
Mayor Hugh Grant ordered the removal of unsafe wires, and New York had already passed legislation requiring wires to go underground. This event gave the longstanding fight for underground wires a sense of urgency. The panic surrounding electric wires led to a significant shift in the way authorities approached the technology.
The Lesson of Electric Wires
The death of John Feeks and the subsequent panic led to increased scrutiny of the electric wire industry. However, this scrutiny also led to the creation of new jobs and industries. A traveling lineman named Henry Miller organized a convention in St. Louis, which founded what became the International Brotherhood of Electrical Workers. Today, electrical power-line installers and repairers earn a median $95,320 a year.
This lesson can be applied to the current backlash against data centers. While the public may be concerned about the environmental impact and safety of these facilities, the demand for them continues to grow. The companies that build and maintain these data centers will be the ones to benefit from this growth.
A writer who drew a lesson from the history of electric wires notes that a technology’s dangers can make the work of building and maintaining it more valuable. This is particularly relevant in the context of AI, where investors are wary of the potential backlash against the technology. However, the writer argues that this backlash can also create opportunities for growth and investment.
The Demand for Data Centers
Despite the backlash, the demand for data centers continues to grow. Anthropic’s leaked initial public offering prospectus shows roughly $518 billion in compute and infrastructure commitments. About 80% of that is noncancelable or payable regardless of usage, with obligations stretching into the 2030s. OpenAI’s annualized revenue run rate is approaching $70 billion, up more than 70% since the start of the third quarter.
Related Post: Asia’s data centre race hinges on power infrastructure
The backlash against data centers is not stopping the flow of money into the industry. Instead, it is rerouting it towards the companies that build, wire, and power data centers on-site. Experienced electricians now command salaries north of $100,000, and postings for welders and pipefitters are up 164% year over year.
The order books of companies like EMCOR Group Inc., Comfort Systems USA Inc., and Quanta Services Inc. are filled with record-breaking contracts. On the power side, Bloom Energy Corp. has topped $1 billion in quarterly revenue for the first time, up 166%. Caterpillar Inc. is also benefiting from the growth in on-site power generation.
One solution is to build data centers in space, where there are no neighbors to complain about noise or environmental impact. SpaceX has sent its Starship into orbit for the first time, and Elon Musk plans to launch AI compute satellites powered by Nvidia Corp. chips in late 2027.
Anthropic has just signed an $11.6 billion, seven-year compute deal with Akamai Technologies Inc. to tap its distributed cloud network. This deal is a significant indication of the growing demand for data centers and the companies that build and power them.
Building Data Centers in Space
The idea of building data centers in space is becoming more feasible with the advancement of technology. However, the cost of launching and maintaining data centers in space is still a significant challenge. Barclays estimates orbital compute costs roughly three times as much as building on the ground.
Leave a Reply