Cadence Explores How AI Growth Demands Smarter Data Centres

AI and its reliance on high-performance computing have placed data centres at the centre of modern innovation.

As AI continues to transform industries, the energy demands of the data centres that support it are under growing scrutiny.

Cadence, a global software company, addresses this in its report ‘Data Center Evolution: The Innovation Imperative’, highlighting the urgent need to balance innovation, performance and sustainability.

With 80% of global data centre decision-makers expressing concern over environmental impact, the report makes clear that action is not only necessary, but overdue.

While these facilities enable AI’s continued growth, they consume vast amounts of electricity, largely due to processing power and cooling needs.

AI and energy: A dual-edge dependency

AI models require powerful infrastructure to be trained and deployed at scale.

Data centres supply this infrastructure, but at a cost. Their energy consumption is immense, prompting widespread concern about the impact on the environment and national power grids.

To address this, Cadence surveyed 400 business, IT and facilities leaders globally.

Its findings show a sharp awareness of the problem: 32% of those surveyed are very concerned about sustainability and 60% admit to overprovisioning (adding more capacity than needed) to avoid service outages. This practice, while intended to guarantee uptime, contributes further to energy waste.

The report’s publication coincides with the UK’s debut AI Energy Council, which met on 8 April.

Leaders from government, technology and energy – including representatives from Google, Amazon, Microsoft and EDF – discussed how to align AI innovation with the UK’s clean energy goals.

Peter Kyle, Secretary of State for Science, Innovation and Technology, says: “The work of the AI Energy Council will ensure we aren’t just powering our AI needs to deliver new waves of opportunity in all parts of the country, but can do so in a way which is responsible and sustainable.

"This requires a broad range of expertise from industry and regulators as we fire up the UK’s economic engine to make it fit for the age of AI.”

The meeting focused on how the UK could maintain AI leadership while managing the environmental consequences, reinforcing the message that sustainability must underpin technological progress.

Innovation barriers and regional advances

Despite the urgency, many data centres continue to lag in adopting new technologies.

Cadence finds that 86% of leaders believe failure to innovate will have serious or moderate consequences. The risks they cite include falling behind competitors (37%), suffering financial losses (30%) and struggling to meet AI demands (27%).

Yet, there is progress. Six in 10 respondents reveal they feel more confident in using new technology now than they did 12 months ago. In South America, that figure rises to 68%.

Aitor Zabalegui, Senior Principal Application Engineer at Cadence, attributes this leap to a form of digital leapfrogging: “Past adoption trends can also shed light on why those working with facilities in South America have become markedly more confident in their innovation capabilities over the past year.

"Consider the fact that some parts of the world skipped straight to wireless technology, rather than going through the infrastructure that paved the way for it, such as power lines.

“In the same way, certain regions have been able to jump straight into certain data centre innovations, rather than going through all the innovative steps. This is because they have seen others navigate these over the past few years to reach a desirable end goal and been able to take on these learnings and quickly jump to the more advanced stages of adoption.”

Cadence encourages organisations to consider innovation that matches operational needs rather than adopting technology for its own sake.

This tailored approach, combined with a long-term view on return on investment, allows operators to stay competitive while managing complexity and cost.

Making sustainability core to infrastructure

With global attention on climate change and energy resilience, data centres are under pressure to lead by example.

Cadence’s report highlights renewable energy adoption as a growing trend.

Already, 63% of surveyed organisations use renewable energy in their operations and a further 19% plan to follow. Yet 9% remain resistant, citing perceived unreliability and limits in local grids.

One promising development is the reuse of waste heat—a process where the heat generated by servers is redirected for other uses, such as heating buildings. Cadence notes that 40% of data centres already do this, with 26% planning to begin in the next year.

Dave King, Product Engineering Architect at Cadence, describes this strategy as crucial: “Every site operates within a fixed power budget. By improving infrastructure efficiency – in other words, enabling greater processing capability without increasing power consumption – more energy can be allocated to compute tasks.

"This allows the data centre to deliver improved performance and value, creating a competitive advantage. Greater efficiency also means improved sustainability, which is increasingly important given environmental concerns and regulatory pressures.”

Increased investment in energy-efficient design and smart cooling technologies is emerging, alongside government efforts to streamline access to clean power.

The UK Government is expanding infrastructure to ensure more homegrown renewable energy can connect to the grid.

This not only reduces dependency on fossil fuels but shortens the queue for data centre grid connections.

Ed Miliband, Secretary of State for Energy Security and Net Zero, says: “We are making the UK a clean energy superpower, building the homegrown energy this country needs to protect consumers and businesses and drive economic growth, as part of our Plan for Change.

“AI can play an important role in building a new era of clean electricity for our country and as we unlock AI’s potential, this Council will help secure a sustainable scale up to benefit businesses and communities across the UK.”

The data centre’s future: responsible, innovative, sustainable

Cadence’s report makes clear that the data centre sector stands at a crossroads.

AI’s continued expansion demands more power and processing capacity, but the path forward must be sustainable.

Innovation is not optional—it is central to ensuring both environmental and commercial viability.

Organisations that blend innovation with operational practicality will find themselves better equipped to meet growing AI workloads without sacrificing efficiency.

Those that integrate sustainability from the outset, through renewable energy, smarter cooling, waste heat reuse and digital-first thinking, will be best positioned to navigate the next stage of technological growth.

Cadence concludes that collaboration across data, infrastructure and sustainability will shape the next phase of data centre evolution.

As the AI revolution continues, the need to power it responsibly becomes one of the sector’s defining challenges.

The data centre’s future: Responsible, innovative, sustainable

Cadence’s report makes clear that the data centre sector stands at a crossroads. AI’s continued expansion demands more power and processing capacity, but the path forward must be sustainable. Innovation is not optional—it is central to ensuring both environmental and commercial viability.

Organisations that blend innovation with operational practicality will find themselves better equipped to meet growing AI workloads without sacrificing efficiency. Those that integrate sustainability from the outset—through renewable energy, smarter cooling, waste heat reuse and digital-first thinking—will be best positioned to navigate the next wave of technological growth.

Cadence concludes that collaboration across data, infrastructure and sustainability will shape the next phase of data centre evolution. As the AI revolution continues, the need to power it responsibly becomes one of the sector’s prominent challenges.

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