As artificial intelligence (AI) continues to grow in capability and adoption, the technology infrastructure required to support it is rapidly expanding. The rise of AI has led to the development of specialized data centres built to handle the high computational demands associated with AI workloads.
In this post, we explore the core infrastructure of AI data centres and analyze how Canada’s energy infrastructure, policy landscape, and environment position Canada as a desirable location for AI data centre development.
What Is an AI Data Centre?
A data centre is a physical facility that houses computer systems used to store, process, and manage data. Traditional data centres contain many of the same components as an AI data centre, such as servers, storage systems, and network infrastructure; however, these components operate at a much higher capacity in an AI data centre to meet the speed and processing demands of AI applications.
Power Requirements
AI data centres require large amounts of electricity to power high-performance hardware such as graphics processing units (GPUs). As demand for AI and cloud services grows, this is driving a sharp rise in energy use by data centres. In 2024, it was estimated that the transmission of data (including associated infrastructure) consumes 260 to 340 TWh per year, which represents roughly 1% to 1.4% of the electricity used globally. According to the International Energy Agency, this figure is expected to more than double by 2030.
In recognition of the high energy demands of AI data centres, governments and industries worldwide are taking steps to ensure their continued competitiveness in AI.
In the United States, some of the largest technology companies have already signed on to long-term power agreements with US energy providers to secure reliable electricity.
Canada offers a competitive advantage with its abundant energy sources that can provide continuous, reliable power to data centres around the clock. Alberta, in particular, could be an attractive option for investors, since its deregulated electricity market may make it easier for technology companies to establish long-term power agreements with local energy providers.
Cooling Requirements
In addition to high electricity demands, AI data centres also generate significant heat as a byproduct of powering AI-related hardware. Managing this heat through cooling systems such as liquid cooling technology is critical to maintain system performance and prevent hardware failure. Canada’s cooler ambient temperatures could help reduce the need for these energy-intensive cooling systems, thereby resulting in lower operational costs.
Canadian Sovereign AI Compute Strategy
The government of Canada is showing its commitment to developing AI data centres and plans to invest $2 billion over five years to launch new initiatives that will provide companies and researchers with the tools they need to compete in the global AI data centre race. In December 2024, the Government of Canada launched the Canadian Sovereign AI Compute Strategy, which sets out the plan for how this funding will be allocated.
The strategy is built around three core objectives:
- Mobilize private sector investment.
- Build public supercomputing infrastructure.
- Establish an “AI Compute Access Fund.”
(1) Mobilize private sector investment
The federal government is investing up to $700 million through the AI Compute Challenge to support projects that establish fully integrated AI data-centre solutions. Commercial entities, industry consortia and industry-academia partnerships are eligible to apply for funding. Funding will be prioritized for projects that meet the following objectives:
- Build out or expand the capacity of commercial AI-specific data centres in Canada.
- Provide flexible and affordable compute offerings.
- Contribute to anchoring or growing Canadian AI champions.
- Advance innovative and sustainable compute solutions.
(2) Build public supercomputing infrastructure
The federal government is investing up to $1 billion to build public supercomputing infrastructure to help meet the needs of researchers, governments and industry, including those relating to AI. The investment includes:
- $705 million in a new AI supercomputing system through the AI Sovereign Compute Infrastructure Program. Under this program, builders are able to submit a statement of interest to the Government of Canada to assist with infrastructure development. The government will also launch a full proposal phase shortly that will further refine the program requirements.
- $200 million will be provided to augment existing public compute infrastructure.
(3) Establish an “AI Compute Access Fund”
The federal government is investing a further $300 million into the “AI Compute Access Fund” to support the purchase of AI compute resources by Canadian innovators and businesses. To be eligible for funding, a participant must be a Canadian-registered for-profit company developing AI products or services and must have fewer than 500 full-time equivalent employees.
Conclusion
As AI advances, investment in data centres is increasing to meet the associated growing infrastructure demands. Based on recent trends, capital expenditures in the trillions of dollars are expected over the next few years to support the global buildout of new data centres. With its abundant energy resources, favourable natural environment, and strong government backing for AI, Canada is well positioned to play a leading role in the global AI infrastructure landscape.