Logistics as an enabler of AI development

As the internet revolutionized the world and created a digital boomerang, where opportunities and risks collided, it created a catalyst for innovation, where many ideas were tested and business models were tried in the light of new technologies. Now, artificial intelligence (AI) is poised to take over the stage as the next great technological revolution.

A winning sector is predicted to be the enablers, i.e. those who create the conditions and build the infrastructure to utilize the technology.

We are seeing many different companies emerge that are either leveraging AI or using the concept as a way to market themselves. However, there are industries that will be profoundly changed by AI. Both through direct use of the technology and as providers to the new industry of cloud computing which is now being boosted by AI.

When we discuss AI colloquially, it tends to be an umbrella term for any technology that leverages computing resources to solve problems. In this article, we focus on AI and cloud computing as a catalyst for new services in areas such as logistics and warehousing.

A common denominator for many of the applications we use on a daily basis is that they require high transfer capacity and the ability to store and process large amounts of data. This applies, for example, to image processing, video streaming, remote office applications and the analysis of large amounts of data. It is mainly the latter, the analysis of big data using AI, which is still in its infancy but is expected to grow rapidly. At the same time, traditional IT services continue to grow with more users and more data to be stored and managed.

The rise of AI requires huge amounts of processing power and storage space. Self-generating AI models in particular will require significant resources. The more companies get access to the tools, the more applications will be developed.

All in all, this means an increased demand for large hyperscale data centers, which means huge investments in infrastructure. The hallmark of a hyperscale data center is that it is huge and super-scalable. A hyperscale data center can have an installed capacity of over 150 MW, which corresponds to the needs of a medium-sized city. The Nordic region has been identified as a prime location for the establishment of data centers, especially hyperscale data centers.

Factors such as the favorable climate for cooling facilities, heat recovery, high quality of communication infrastructure, availability of a well-trained workforce, sustainable electricity generation from hydro, solar, wind and nuclear power, as well as the availability of land all come into play. It is estimated that a hyperscale operator invests around $10 million per megawatt, resulting in total investments of up to $1.5 billion for an establishment. The opportunity cost of capital alone amounts to millions of dollars per day, so now it becomes important to be able to generate revenue quickly.

A typical project spans several years and requires logistics that can handle large quantities of valuable components in an uninterrupted flow. All components for a data center come from different parts of the world and require customs clearance, quality checks and intermediate storage before they are finally assembled. The logistics must be efficient, secure and in line with applicable customs and import regulations.

Efficient Logistics in Focus