Digital Economy Weekly - January 5, 2025

Story of the Week

End of the Year

Cue the opening bars of the Richard Strauss tone poem “Also Sprach Zarathustra.” It's the dawn of a new year and the eternal optimism some of us have to improve the lot of human beings and the world in which they live.?

What will be the big stories this year?

1. AI was the obvious big story in 2024 in the global tech industry, and there's nothing short of worldwide catastrophe to stop it from dominating further in 2025. The difference this year will be AI will be discussed and implemented in more specific manifestations – not just to settle arguments about the greatest QB of all time, but to improve industrial processes, the supply chain problems that appeared during covid and are still not fully resolved, trading in global markets, and hi-res imaging analyses in healthcare.

2. Quantum computing seems to be on the cusp of real implementation. As this article puts it, “quantum computing stocks are the new AI stocks.”

3. The cloud-computing pendulum has been swinging back and forth for at least 15 years now. Highly touted, then pushback. More touting, more pushback. The Big Two+ cloud vendors (AWS, Azure, Google) take a few more points of market share each year, while IBM, Oracle, and niche players continue to fight for a point here and there. But inevitably, as the big public vendors take control, fear and loathing ensues, as enterprises realize they may be giving away the game by giving up control. This issue should start manifesting itself in a bigger way throughout the developing world this year, too.

4. Will cybersecurity ever become sexy, or at minimum a shiny new toy? This is doubtful, yet the relentless nature of hostile nation-on-nation attacks behooves all government agencies and enterprises of every size to put this unglamorous topic at the top of its priority list. The fate of the world depends on it.

5. A strange sort of “populism” is taking over the world, starting with the United States, continuing through the EU, and revealing itself in nations on every continent. This varietal favors strongmen and wealth, rather than the grassroots revolutions usually associated with the term. Eventually, these governments will go after big tech, because there's room for only one boss in these environments. The big story of the year will likely be the clash of the autocrats and the oligarchs, starting with the US. This clash will have little bearing on the tech industry itself, unless stock markets start crashing. Then the real stuff will hit the fan.

Links of the Week

Is There a Megawatt Rack Density in Your Future?

Infrastructure provider Vertiv is throwing out some crazy numbers about AI-driven datacenters. Noting that “AI continues to reshape the data center industry,” the company covers it technical bases by discussing complex cooling strategies, regulatory concerns about AI, and sustainability, before predicting an age of 500K or even 1000K rack densities. Read here.?

Microsoft Trims Its Wisconsin Plans

Poor Wisconsin can't get a break from the big tech companies. Not only has the Potemkin nature of Foxconn's alleged interest in the state long been revealed, now Microsoft has hit the brakes on what the company had earlier said would be a multi-phase development project in the state. A Microsoft statement said the company still plans to invest $3.3 billion by the end of 2026, but is reconsidering going any further than that. Even the $3.3B represents a considerable investment in a state with an economy that generates about $400 billion annually. Read here.

New Atlanta-area Data Center Project Sails Into View

Something called Project Sail encompassing 5 million square feet of data center space has been proposed in a filing in the Atlanta area. The alleged developer is called Atlas Development, with the usual secrecy obscuring whomever is behind the project. The footprint would encompass 13 building and require an investment of $17 billion. This area calculates to 114 acres of building space, with the investment implying as much as 1.5GW of data center footprint. Read here.

Reserve Bank of India Greenlights Pre-Paid Online Payments

Sophisticated payments systems are moving forward in India. The latest wrinkle is approval by the Reserve Bank of India to allow pre-paid instruments (PPIs) to make payments through third-party apps. This brings Amazon Pay, PhonePe, and Paytm Wallets into the game. Users will authenticate their payments through unified payments? interface credentials.?Read here.

Nvidia's AI Chip Lead is “Sustainable,” According to New Report Nvidia's lead in AI chips is “sustainable” for years to come, according to a new analysis from investors Loop Capital Markets. The chip company is staring at “a $2 trillion opportunity” in the evolving AI industry. The analysts somewhat bizarrely compared Nvidia to the band Nirvana, which despite a certain similarity in names, may not be the best analogy to follow very far. The point seems to be that both caused sea changes in their respective endeavors. Read here.

Grid Instability Forcing European Data Centers to Stall Net Zero Targets

"Volatile energy costs and grid stability" are leading many European data center operators to push back their Net Zero targets, according to a new study. More than 90 percent of executives surveyed have said this is so. Almost the same number are pushing for more "decentralization" of their energy supplies, meaning they want to rely less on utilities and more on local, self-supplied resources. Read here.

Heard in the Industry

"By banning the export of EUV (extreme ultraviolet technology), China will lag 10 to 15 years behind the West.” – ASML CEO Christophe Fouquet, speaking to Dutch publisher NRC. ASML created EUV, which the company said took it 20 years to develop.

Heard in the Aisle

“Average rack densities have been increasing steadily over the past few years, but for an industry that supported an average density of 8.2kW in 2020, the predictions of AI Factory racks of 500 to 1000kW or higher soon represent an unprecedented disruption.” – Prediction in a press release from Vertiv. Read here.

Country Snapshot: Poland

Poland's economic success over the past three decades is not a secret. It emerged early a less expensive business location than neighboring Germany, and has built , and some leadership in IT services and software development its three major cities (Warsaw, Wroclaw, and Krakow), with significant progress in several others.?

With more than 40 million people, Poland has a large domestic market as well, with an economy that ranks 10th in size within the EU as it approaches $1 trillion annually. With purchasing-power parity (PPP) of twice its nominal income, Poland remains a relative bargain. It falls into the second tier of economic progress within the IDCA Digital Readiness Index – classified as an “Edge Country” (one of only 17 in the world) that are making valid progress toward having a fully-developed economy.

Sustainability is Poland's weak point – or seen another way, its greatest area of opportunity. It currently gets 18% of its electricity from sustainable sources, slightly below the world average. Poland was a signatory to the COP28 call for aggressive new nuclear development, so has clear intentions to work that into its energy mix.?

Poland's sustainability report card is also marked down by its relatively inefficient manufacturing sector. A well-known coal and steel producer, complemented by its major Baltic Sea port of Gdansk, the country now produces CO2 and related emissions with about half the efficiency of Germany or the United States.

Thus, Poland ranks 39th among 183 nations in its overall IDCA Digital Readiness score, in which sustainability accounts for about a quarter of the score. Looking at its relative digital infrastructure profile alone, it moves up to 24th in the world, on a relative par with France, given its lower income than France.

If one can visit only one European country to scout for markets, partners, or investments related to digital infrastructure and the Digital Economy, Poland should be strongly considered as the choice.?

Inside IDCA

PTC Shapes Up? as Key Early-Year Event

The PTC telecom event will reconvene January 19-22 in Honolulu, with its traditional early-year kickoff of the big trends and developments in the global digital infrastructure industry. IDCA is sending a big delegation to the event, led by Chairman and CEO Mehdi Paryavi, and including Jessica Ho (Manager - ASEAN), Eddie Hamner (Manager – North America), Buddy Rizer (Global Head of Digital Hubs), Kurtis Friesen (Director – North America), and Mark Gusakov (Chief Certification Officer). Anyone attending PTC in Honolulu should feel free to reach out to any and all IDCA team members to learn about the organization's vision and expanded activities in 2025.

https://www.dhirubhai.net/company/international-data-center-authority-idca/posts/