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Technical Foundations

How Data Centers Work

From racks to cooling systems, understanding the engineering challenges of facilities that power modern AI.

6 min read

Key Takeaways

  • 1 Data centers are heat removal problems—all electricity becomes heat that must be extracted
  • 2 AI increased rack power density 10x—from 5-15 kW to 60-140+ kW per rack
  • 3 Cooling technology determines facility design and maximum power density
  • 4 PUE measures efficiency—modern facilities achieve 1.1-1.2 (only 10-20% overhead)

The Rack: The Fundamental Unit

Walk into a data center and you'll see rows of tall black cabinets. These are racks—the fundamental building block.

19" wide × 42U (73") tall
Traditional Era

5-15 kW per rack

20-40 servers @ 200-500W each

AI Era

60-140+ kW per rack

4-5 HGX servers @ 10kW+ each

Power Density Impact
10x
power increase
140 kW
per rack (max)
100+
homes equivalent

The Heat Problem

Here's inescapable physics: all electricity becomes heat. A 100 MW facility produces 100 MW of heat that must be removed continuously.

Power In = Heat Out
No exceptions. No shortcuts.
NVIDIA H100 Chip
0°C 90°C max
Above 90°C = throttling or permanent failure at $30,000 per chip

Cooling Technologies

The cooling approach determines everything: facility design, maximum density, and cost.

Air Cooling
≤20 kW per rack

Traditional HVAC, raised floors, perforated tiles

Direct-to-Chip
40-80 kW per rack

Liquid cold plates on processors, becoming standard for AI

Immersion
300+ kW per rack

Servers submerged in dielectric fluid, highest density

PUE: Measuring Efficiency

Power Usage Effectiveness measures how much overhead a facility requires. Lower is better.

PUE =
Total Facility Power IT Equipment Power
Legacy (2000s)

PUE 1.6 - 2.0

60-100% overhead

Modern Hyperscale

PUE 1.1 - 1.2

10-20% overhead

Saline Township, MI (1.4 GW IT Load)
420 MW saved by PUE 1.2 vs 1.5

Redundancy: The Cost of Reliability

Data centers can't go down. Redundancy ensures failures don't cause outages—but it comes at a cost.

N+1

One spare unit beyond minimum

2N

Double everything (~2x cost)

The Cost of Nines
99.9%
8.76 hrs/year down
99.99%
52.6 min/year down
99.999%
5.26 min/year down

The Scale of AI Data Centers

Modern AI facilities are among the largest infrastructure projects in the world.

Saline Township, MI - Project Example
1.4 GW
IT load
250
acres
$7B+
investment
18,000-23,000
racks (at 60-80 kW each)
1.68 GW
heat removed continuously
2-3 years
construction timeline

And this is just one facility among hundreds being built for AI.

Go Deeper

Chapter 3 of This Is Server Country explores how data centers evolved from server closets to gigawatt-scale infrastructure—covering cooling technologies, power distribution, redundancy systems, and the engineering trade-offs that shape modern AI facilities.

Learn more about the book →