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Power and compute: Rearchitecting the data center for the AI era

Christopher Butler, President, Industrial Business at Flex
by Christopher Butler
President, Embedded and Critical Power
Rob Campbell, President, Consumer Devices, Flex
by Rob Campbell
President, Communications, Enterprise and Cloud
Posted on
December 3, 2025

Down come the walls

As data centers shift to the use of higher voltages and advanced liquid cooling technologies to support 1 MW racks, less room will be required for power conversion, power distribution, and the equipment needed for air-cooled environments.

Graphic showing next generation of data center growth

A transformation is underway that will completely revamp AI data center infrastructure within the decade. Standalone power cabinets and CDUs will free space in the IT rack for compute, which means that fewer, denser, and more performant IT racks will be required to process workloads. And instead of every rack requiring its own power and cooling system, sidecars will deliver energy and remove heat from several compute-dedicated racks simultaneously. That translates into open space ripe for further innovation.

The walls that divide grey space (electrical room) from white space (data hall) are coming down as IT racks and power and cooling units become more focused, powerful, and efficient. The transition is profound. By our estimates, next-generation data centers will require 90 percent less space to produce the same outcomes they do today, and they’ll do so more efficiently.

What will hyperscalers do with their newfound square footage? Likely boost compute density in gigawatt data centers, but that remains to be seen. With more possible in a smaller footprint, they could also choose to reduce data center sizes and lower capex construction costs. Either way, the transformation is both an enabler and an opportunity, and we’re excited to collaborate on AI-era infrastructure innovation and the products that make it possible. Our bold prediction: higher efficiency, lower operating costs, and greater resilience even as the power, compute, and cooling demands placed on AI-era data centers escalate — a positive transformation, indeed.

Want to learn more?
Watch us explore the topic in-depth on stage at OCP Global Summit 2025.