AI power swings are breaking data center equipment, report finds

The rapid power swings generated by artificial intelligence workloads are breaking critical infrastructure at data centers, prematurely destroying batteries, generators, and cooling systems in ways the industry did not anticipate, according to a Bloomberg investigation published Thursday based on interviews with more than three dozen power experts across the US and Europe.fortune+1

Millisecond Shocks Breaking Hardware

Unlike traditional data centers with relatively steady electricity consumption, AI facilities see power demand surge and collapse within milliseconds as hundreds of thousands of graphics processing units synchronize during model training. Shannon Miller, founder of Mainspring Energy, described a gigawatt data center as equivalent to a city the size of Boston, "half of which can flicker on and off every few seconds."fortune

At xAI's Colossus computing facility in Memphis, Tennessee, gas-fired turbines have developed cracks, according to a person familiar with the matter. Batteries installed to buffer the swings have needed replacement within weeks or months. Similar turbine cracking has occurred at smaller data centers in the UK, confirmed Andrew Cunningham, CEO of GeoPura Ltd.news.futunn+1

Drew Baglino, a former Tesla ↘ 0.63% executive who founded Heron Power Electronics Co., said AI power usage can spike as much as 50% above design capacity — "so a 1 gigawatt facility may use 1.5 gigawatts for a split second." His company is developing power management equipment for Nvidia's ↘ 0.10% next-generation servers, due in 2027.fortune

Revenue at Risk

The financial toll extends well beyond equipment replacement. "The financial consequence is not primarily replacing a pump or a breaker — it's the value of that expensive compute capacity not generating revenue because it's offline," said Jason Hoffman, chief strategy officer at data-center operator Switch.fortune

Downtime costs range from thousands to hundreds of thousands of dollars per minute. Some facilities are seeing uptime closer to 80%, far below the year-round continuous operation that financial models assume. A person involved in data center financing warned this could hit investors within 12 to 24 months unless resolved.news.futunn+1

Grid Stability Concerns

The North American Electric Reliability Corp. earlier this year issued a rare level-three alert requiring large data centers to address immediate risks to grid stability, with responses due by August 3. NERC found that about three-quarters of load models for more than 33 gigawatts of operational US data centers were "insufficient to represent data-center dynamic behavior."fortune

Schneider Electric's Sreemant Roy warned that the fluctuations "can lead to, if not corrected, potential blackouts or power outages," adding: "That has made utility companies globally very worried."fortune