Explainer: What is a data centre and why is everyone freaking out now?

Data centres have been around for decades, but recent political debates have brought them back into the spotlight. In New Zealand, the Green Party has called for a one-year pause on new AI data centres, a move that mirrors a moratorium in New York state. Prime Minister Christopher Luxon's government supports the technology, but questions remain about the environmental impact.

A data centre is essentially a large, cooled building housing racks of servers and other IT hardware. These facilities are crucial for processing and storing data, with air conditioning playing a vital role in maintaining optimal temperatures. Data centres are noisy and often located in cooler areas to minimize the need for artificial cooling.

The concept of data centres dates back to the 1980s, with early cloud computing setups appearing in New Zealand. Companies like Telecom (now Spark) and various government departments have maintained on-premises data centres, while third-party firms like Datacom manage infrastructure for businesses.

However, the current focus is on AI data centres, which are more power-hungry and water-dependent. Datagrid, a large-scale data centre in Southland, will consume 280 megawatts of power and draw up to 600,000 litres of groundwater daily. This represents a significant shift in scale and purpose compared to previous data centres.

Opposition to AI data centres is growing, particularly in the United States, where local opposition has blocked or delayed over 75 projects worth $130 billion in the past three months. Concerns revolve around resource allocation, environmental effects, and the potential for data centres to compete with local communities for electricity and water.