Not Your Father’s Data Center - Powering the Future: Navigating Data Center Energy Consumption

Episode Date: November 28, 2023

In this episode, we dive into the world of data centers, and their energy consumption, with Govi Ramasamy, Executive Director & Power Generation for Data Centers at Cummins Inc. Govi is a distinguished authority in the realm of data center sustainability and energy efficiency, bringing over two decades of expertise to the table.With degrees in Mechanical and Industrial Engineering and an MBA from Northwestern University, Govi's career has been dedicated to unraveling the complex challenges posed by data center energy use. He has been at the forefront of developing innovative solutions to reduce environmental impacts while enhancing operational efficiency.Govi sheds light on the evolving landscape of data center technology. From advancements in cooling and power management to the latest trends in renewable energy integration, he discusses the dynamic strategies being employed to make data centers more sustainable.They then talk about the critical importance of optimizing data center energy consumption, particularly in the digital age. His extensive knowledge and forward-thinking ideas make this episode essential for those intrigued by the energy dynamics of data centers and their profound implications for our environment and technology-driven world.Govi’s LinkedIn: https://www.linkedin.com/in/goviramasamy/ 

When we look at any solutions, Raymond, we look for three things. One is technical feasibility. Is it technically feasible? And second is supply chain feasibility, right? Is it really commercially feasible? Because at the end of the day, economics matter, right? You can have a best solution out there, but if it doesn't actually mean a cost-effective option for those who are using it,

it doesn't really actually drive adoption, right? All right. My name is Raymond Hawkins. Welcome again to another edition of Not Your Father's Data Center. Today, we are joined by my friend from Cummins. I want to make sure I get it right. Govi, you are the executive director of global data center business. So all things data center, you're in charge. Do I get that right?

That is absolutely correct, Raymond. And thanks a lot for having me here. So all things data center within Cummins. Excellent. All right. So I just want to, I got to start off with a couple of really interesting facts. Your last name is Rama Sami, no W, not to be confused with any presidential candidates, right? Yeah. I don't have any aspirations whatsoever. Not looking. Okay, just want to make sure you weren't making any announcements here today. You're not running for office. Okay, good. All right, just want to make sure, going to stick with the data center business. Let's spend a few minutes on you, but I know

you've had experience all over the world. If you'll give us a little bit of your background, how you got in the data center business and some of the places you visited, because when I think about data centers, you've hit a lot of very interesting places in our world. So you want to give us a little bit of the Govee background, that would be great. Absolutely, Raymond. Thanks a lot. It's good to talk to you over the podcast. Been with Cummins for 16, 17 years, but my story is like similar to any immigrant story. Coming into the U.S., grew up in India, came over here to study in Auburn. I believe that's your other matter. We shared that.

War Eagle. War Eagle. Love it. 2002 to 2004. Background in supply chain operation. That's where my focus is. Just some seamless promotion while you do your intro. That's all.

We need more of that now. That's right. Since then, supply chain operations joined Cummins in 2006 in Minneapolis. We are in the power generation sector. So it was a really awesome Operations joined Cummins in 2006 in Minneapolis, in the power generation sector. So it was a really awesome experience joining Cummins. Back when we were actually going through the initial phase of the growth driven by data centers, if you remember, I wouldn't call it the badness, but actually the huge long lead times that we had in data centers,

generators back in 2006, 2007, 2008, really through the period of that. And then came the crash. Great experience just living through the supply chain and how we react and went through that experience. And since then moved around in different aspects within Cummins. Cummins has been awesome in giving me opportunities. Worked in China leading the power generation business

for a few years when the data center was actually starting to pick up where it was originally dominated by the China Mobile, China Unicom, China Telecom, and Baidu, Alibaba was coming in right now, then Tencent, and then they call it IDCs, but essentially co-location players started actually picking up their business. So great experience setting the business up and actually growing, working with a phenomenal team that we have in China. And uh did some uh gas projects epc so i was fortunate to actually to work in uh implementing

a lot of epc projects in europe in uk in particular but the capacity market was actually is super hard so we delivered close to 500 600 megawatt worth of projects uh in in uk and then uh prior to this i was leading our distribution business in Middle East, in UAE, Saudi Arabia, Kuwait. And for the last 200 years, I've been in data center space. I thought I knew data centers before taking this role, but man, a lot of things have changed

since in the last seven years. And every single day I wake up and I learn something new. It's been a phenomenal ride so far. And I almost feel like actually we're just getting started. Yeah, boy, man, talk about great global experience, great market experience, the Middle East, China, Europe, North America. I mean, you've been in a lot of places and you're talking about that China Mobile, China Telecom, when they were really

building out their facilities. And I think lots of people, you know, the supply chain crisis that came along with COVID forgets that it wasn't the first time we had a real bad supply chain issue. You're bringing up 06, right? I mean, you have to have been around a while to have remembered it, but man, it's not the first time supply chain has hurt the delivery windows for all of us. All right. So we appreciate you here in your professional background. I am going to be remiss. I've already held the helmet up. We got a highlight that you were at Auburn in 2004. It's worth talking about how great that team was. You were new to Auburn. Give us just two minutes. I know it's a long way back, but you can probably remember two or three highlights about the 2004 season for you. Where do we start? So,

I mean, sports has been a part of my life all through my dad was a volleyball coach. I played volleyball all my life. My sisters played volleyball for the team's college. So coming into U.S., trying to figure out which game I can pick up because I can play basketball. But then Auburn, I think the first game that I went to was actually this Alabama game. So it was iron ball and it was madness. And I couldn't actually relate to the euphoria around it and so on. But I was hooked completely.

And the passion and the drive that everybody shows. The whole university town, I think it's like 24,000 people. During the weekend, it actually goes up to like 40,000, 45,000, like sea of orange and red. And it's like, it's absolutely crazy. And they're great. 2004, what I remember, I think at the beginning, if I'm not mistaken, 2003, Tommy Twovell,

he was almost going to be fired that year. And then somehow he came back and we had a new offensive coordinator. And then the defensive coordinator was pretty good actually, Gene. But then we went 13-0 it was like a rollicking start from the beginning all the way through we had like great players i mean you go back and look at it you have cardinal williams right it's cadillac williams what we call yeah ronnie brown and then uh carlos rogers jesus campbell i mean just name it the best players i'm actually of, and I happen to be there in every single game.

One of those things, the only thing I would actually feel bitter about that is actually we didn't get the national championship. That was the bummer because we were actually, we didn't get a chance to go play in the national championship. I think it was between USC and Oklahoma, if I'm not mistaken.

You got it right. We didn't get a chance. But again, 2011, we won it. So that's all that matters at the end of the day. So Govi, I love that you were at the Iron Bowl the year before. Then you got to see the 13-0 season. And here's the great thing about it. Lots of people say that that season changed college football

because you had an undefeated SEC champion not playing in the national championship game. And if you remember, that's when everybody started going, this doesn't work. And the BCS and then playoffs came soon thereafter because people couldn't believe that an SEC champion wouldn't, undefeated SEC champion wouldn't be in the game. And you're right.

USC plays Oklahoma and they blow Oklahoma out. It's some ridiculous number, 56 to seven or something horrible. And the great irony in that is after years later, and they blow Oklahoma out. It's some ridiculous number, 56-7 or something horrible. And the great irony in that is after years later, they find out that USC had violated a bunch of rules. The NCAA vacates the national championship. They vacate Reggie Bush's, who is their tailback, USC's tailback. He vacates the Heisman.

And to this day, the NCAA record books show no national champion in 2004, which is crazy because their Auburn was at 14-0 in number two position, and they won't recognize us as national champions. So I'll just tell you I have a personal letter-writing campaign. I routinely write the NCAA and say you should recognize us. So you got to live through, I think, college football history because the reason we have a playoff today is that season. I'm still waiting for the team to come back and actually regain the glory.

I just keep checking the scores. This time it doesn't look like, but hopefully next year it'll be much better. Well, we're certainly headed in the right direction, but yes, you are right. The glory days are behind us right now, but recruiting looks good. I'm fortunate I get to go to a few games. And I love what Coach Freeze is doing. I think that our expectations are only heading up. But I think 2025 is before the next time we could get really crazy excited about things. There's just a lot of rebuilding to do.

All right. Well, we're glad to learn about you, your background, where you grew up and where you live now. I think we didn't get that. Minneapolis, right? You're largely in and out of Minneapolis as you serve all over the world, right? Beautiful Minneapolis. Yeah, lovely Minneapolis. Lovely six months out of the year.

A little cold the other six. Well, with the climate change, I would say it's getting to be about seven to eight months. Okay, very fair. I hate to say that, but seven to eight months is okay. I got it. All right, seven months is fair to my friends in Minneapolis. All right. So let's talk about some things that impact mine and your business every day. Let's start with, I think it's one that's on the top of everybody's mind. Our industry

is seen to be a big power eater. And I think that comes with some assumptions about how concerned are we about the environment? How green are we and how do we handle the level of consumption required to do what we do? How do we handle it in a responsible way? We can go with that in many directions, but as a guy who handles the data center business for a diesel generation company, that's probably a subject that's high on your list and also maybe a little challenging to talk about.

But I think we as an industry do a great job being good stewards of the environment. I'd love to hear how Cummins thinks about that. Absolutely. Thank you, Raymond. I get asked this question all the time. And for the record, actually, I don't shy away from talking. And that's part and parcel of actually who we are in the company as well, because it's an industry problem.

Our generator is the backup. We provide backup source of power for data centers. When everything goes off, like when the power goes out, then we have the last line of decisions to come to bring it online. Cummins, Caterpillar, MTU, Kohler, those who are playing in the market. So we play a critical role of actually making sure the lights are on when the power goes off. And our job is to actually make sure that we understand where the dynamics of the market head to,

the concern about the decarbonization, the carbon, the climate change and everything, and make sure that actually we come up with viable solutions that help the industry move along. So if you don't come out and talk openly about the challenges that actually, that are facing in front of us in terms of grip constraints climate change and carbon greenhouse emissions and so on we are doing it the service so I'm more

than actually happy to actually come and talk about it and and we are doing a lot to learn about the problem and see what kind of solution that we can actually offer that can address that as well and it is an industry-wide problem it's not actually specific to one particular component manufacturer or one particular sector in the industry. It is an industry-wide problem. And I am glad to be in this place in this time to actually to work with industry players to find solutions that make sense.

And even if you take data center industry in general, I would probably say the data center industry has been one of the most forthcoming in terms of publishing how much energy is being consumed and also pushing the grid and the utility to actually incorporate and integrate more renewable solutions into the grid. And down to actually tracking how much of their power consumption is met by hourly matching of renewable energy and so on. So the industry is doing a lot more of course there's a lot more that needs to be done but we must recognize where we come from as well so that we can understand where we need to go the challenge that is in front of us is like a bit different where because because the significant growth and digital infrastructure dependence of economy and this ai driven demand that i'm pretty sure that everybody's talking about the data center industry and the grid constraints that are actually emerging right of economy and this AI driven demand that I'm pretty sure that everybody's talking about

the data center industry and the grid constraints that are actually emerging, right? We have a short term problem in the next several years that we need to address. And the solutions that will actually help us overcome the challenge in the next three to five years may not be the longer term solutions, but maybe a good bridge solution to get to the longer term solutions for which there's a lot that has to happen in the broader economy. So those are the things that we have to take into consideration that keep us actually awake at all times to understand where the industry is heading, where the economy is heading, and how, as a company, we can actually show up and deliver those solutions.

Yeah, Govi, I think you raise, first of all, I think that's an excellent summary. I think our industry is very much in the forefront of being aware of, hey, where's our power coming from? How are we impacting the planet? Are we consuming the power we are in a responsible way? I think it's on the top of mind and on the tips of people's lips all over our business. So I think we're very aware and I think we're good global stewards of what we consume. And we'd agree with you wholeheartedly on that from the processor all the way out to generation, right? And you guys being in that generation chain.

I also would love to hear your thoughts on this constraint that we see globally, right? And you alluded to the AI spike. We can talk about AI demand, but really it's, when I look at the hole in the market or the pain point of the market, it's really around, is there enough power where we need it,

when we need it, because of the spike in demand? And it's been a spike in demand in all the big markets, right? Either we have a generation problem in a market or we have a distribution problem in a market, but we've stretched those markets to the breaking point. And I agree with you, we've got to come up with some three to five-year solutions because the demand's not going away. So how are you guys

at Cummins thinking about that? And I'll use the word bridging power, even though I know that could get misconstrued. But as we think about the global power demand by market, how are you guys thinking about helping bridge that gap? Well, we kind of look at it in two different ways, right? One is how do we provide solutions that can allow a data center operator to get up and running, right? So if there are grid constraints and there are emission regulations that actually govern what kind of equipment that you can put on the site to allow you to get up and running. So that's the problem that we actually look at as one way. And the second one is actually how do you do it in a sustainable way,

where how do you slowly reduce the carbon intensity and the carbon kind of actually operations of those equipment that you put on the ground. So we kind of look at it in two different ways. And our view is right now, if you look at it, we go very strictly with the EPA regulations. Most of the markets, even if you look at U.S., right, it requests a tier two emissions, right? And it is very different than actually way lower than compared to the world under regulated markets.

But what we're seeing is actually is when there are grid constraints, I mean, take, for example, in Arizona or in Northern Virginia, where there are grid, as you said, the power is available, but may not be available 24, seven, 365 days a year. So we are seeing that actually there are some emerging pockets where the role of the backup power source in the data center may be changing slowly and gradually from being purely in terms of backup to actually being called upon to use

when there is a lot more constraint in the market from supply standpoint like it could be like few hours a year or it could be few hours a month but it could be actually more than just hey i don't have a clear power we can actually shut it down and uh and you need to run the on-site power right so that's something that we are seeing and for that there are solutions that are in the market that be coming up with especially tier 4 emissions right we have products that uh that the industry would actually come up with solutions that can meet regulations that can offer an existing like a diesel or any other solution that can meet the emission norms but allows the data center industry to use the

equipment not only when the power goes out but out, but also when there is a peak demand in the market and so on. So that is one solution that we are working on as an industry. The second one is a lot more investment going in and alternate fuels as well, right? Because one thing is to actually get the fuel and how you burn the fuel, that determines the criteria emissions or how much emissions you put out when you actually run the generators. The second is the well to work right for example it goes all the way from what is the carbon intensity of the fuel when it actually goes all the way from the extraction point or generation point to when you actually put it to work and their other view is that hvo has a lot

more uh potential to it and especially in data center market because of the way the carbon intensity, which is like 70% less than what we have considered compared to diesel, well towards in terms of full carbon content. So those are the solutions that we believe that actually can work. We are also exploring quite a bit in terms of natural gas applications as well,

because it does have a lower carbon intensity. But again, it all depends on the use case, right? Do you really want to use that many hours in a year? And does it justify the economics of putting in the infrastructure and so on? What is a good reliability of natural gas grid in the place where you're putting in data centers? So a lot of those things actually goes into considerations. And that is what we're looking at for the next several years is, how do we continue to improve our product where we actually use less fuel right and and at the same time we have after treatment solutions and

we have higher efficiency products that actually consumed and emits less emissions on site and on the second hand how do we actually work with our industry partners to explore alternate low carbon fuels that can reduce the carbon intensity of of whatever solution that you put in place. And that's in the near term, right? And then in the longer term, definitely trying to be working for a company that is actually investing a lot in hydrogen economy. So we are looking at solid oxide. We're looking at femfuel cells.

We're looking at electrolyzers and also different technologies that can actually augment and come with the low carbon or zero carbon solutions on the ground. Gobi, you mentioned that the mission of your generators may not be solely as backup, that you might be looked on to handle peak loads. I may use the wrong term here, but is that somewhat a microgrid idea of, hey, I'm going to do generation on site and I'm going to augment the grid when there's, let's just say, when it's July in Phoenix, for example. Is that what you're referring to there? That is what I'm referring to. But I would be believe, I mean, I would tend to believe that actually it would be more

driven by the local utility companies and the regulation that is mandating it than by choice. Because any given chance I would, I mean, but always the grid power is going to be the cheapest power. And in summer, mostly the grid power is going to be the cheapest power. And in summer, mostly the grid power is going to be the greenest power available in the market. The challenge is always going to be as a peak period when you really don't

have sufficient power to meet all the demand. And then the grid may want to actually require the data center operators to have the flexibility to run onsite power generation, or in the case of actually augmented, right? Take your data center part of the load off of the grid so our interconnected microgrid is where i see things are evolving but again our hypothesis actually is that the flexibility element of it will start to take root slowly over the next five years not something that's going to happen immediately but maybe by 2030 we think it's going to be around 10 to 12 percent of the market but then once it

gets to 2040 2050 we think it's going to be around 10% to 12% of the market. But then once it gets to 2040, 2050, we think it's going to be about 50% to 60% of the market. It's going to be where flexibility would be absolutely required. Again, those are estimates. And what we tend to focus on actually is how do we put quantitative data behind trying to actually model it out? When does it make economic sense? When we look at any solutions ram and we look for three things one is technical feasibility is it technically feasible right and second is supply chain feasibility right or commercial feasibility as you say is it really commercially feasible

because at the end of the day economics matter right you you can have a best solution out there but if it doesn't actually mean a cost-effective option for those who are using it, it doesn't really actually drive adoption, right? So that part of it. And the third part of it is more in terms of feasibility of application in data centers. The data centers now are not the data centers that, like, if you go back 15, 20 years back. 15, 20 years back, a data center of like 10 megawatts is a big data center. Now, one data hall could be actually like 3 megawatt, 4 megawatt, and the campus could be like 300 megawatt, 400 megawatt. So at that scale, the requirements change significantly. You cannot just rely on actually saying that, hey,

this solution would work for this 100-global, 200-global. It has to work at scale. That means if it's running, if the application is actually being deployed, the supply chain all the way going up to the component and also once installation supporting and fuel availability, everything, could be scaling up to support the data center needs. So that is what we look at in terms of,

hey, is it technically feasible? Is it commercially feasible or economically feasible? And good is, is the supply chain and the support infrastructure is viable enough to support our data centers, right? So that is what we actually take into consideration or modeling to understand how we see the adoption growing for different technologies, right? Whether it's in hydrogen, internal combustion engines,

or in fuel cells, methanol, ammonia, natural gas, HEO, diesel, renewable natural gas. So we look at all of those and we model it out to see, is it available? Is it feasible? And what are the probability that actually you get there? And that's what we use to actually to guide ourself in terms of betting on technologies

that may not help immediately, but it may actually help us go faster towards a decarbonization journey five or seven years from now. That is great insight into how you make decisions. I love that. The phrase, I might not get it exactly right, is it economically viable?

Commercially, will this work? Because how great the mousetrap is, if people can't make it financially work in their business model, it doesn't help any. And the fact that you guys have that perspective, I think super, super interesting and super helpful because I used to, in the computer business, before I started doing data centers, I sold computers. Hey, I'll get you as much reliability as you want.

Sysplex mainframes, they started at about $9 million. How many of them would you like? Oh, I don't need quite that much reliability. Okay, I didn't figure you did. And so what capabilities that are actually make financial sense for the application? Govi, I know another subject that we hear a lot about in the data center business and the generator businesses is alternative fuels. Hey, we want to be super efficient. We want the generator to run really well, but there's also talk about what you can

power it with, right? It doesn't have to be diesel. It can be your natural gas. It can be HVO. I'd love to hear your thoughts and what Cummins' experience has been when we think about alternative fuels for these generators. It's one of the most hottest, hot topic that we are debating internally as well. And our understanding of what solutions would work for data centers is emerging. It's evolving, right? As we actually learn, test some units and different fuels and look at economics and see whether it actually makes sense or not, right? Some of the things we looked at, for example,

we talked about HVO, right? Hydro-treated vegetable oil, that we believe is the right product solution because it can store, it can be mixed in with diesel in any mix, any blend would actually work without much loss in terms of the performance and the power. The well-to-work emissions, as I said, is like 70% of the diesel

that is really good. And it has shown that it can improve the particulate matter emissions as well. There are some challenges. The real challenge is the cost premium of HEO compared to diesel, right? And data center shouldn't be much of an issue, but it is something that we're tracking closely as well, right? Even if you take US, for example, most of the refineries that are actually manufacturing HVO is the west of the Mississippi, but a lot of demand is actually on the east of the Mississippi. So there is a challenge when it comes to the cost of manufacturing HVO

compared to the diesel, but also the cost of actually transportation. So if you add everything up, it's not well set up. But we're hoping that as more data center companies adopt HVO, it becomes a very well adopted fuel and data center industry, and it becomes our primary go-to fuel in the market. And other areas we looked at, just like any other company, would be is methanol. That is something that's been discussed about as a really good fuel and then ammonia. And then that is on the internal combustion side and also natural gas, right? Natural gas is known, so it is a good product. The challenge of natural gas is like adopting that to the data center application

because most of the natural gas applications that we see in the market are mainly for design towards efficiency rather than actually start-up time transient performance that are specific to data centers. Methanol and ammonia are something that we're tracking. It could be a good fuel, but it won't be a drop-in fuel, right? So a drop-in fuel is that you have a diesel tank, you have a fuel tank, you have diesel, you can't get HVO, so you fill in diesel,

and then you come back and you found HVO, you fill in HVO. The product doesn't actually care, right? It performs really robustly and so on. But other fuels, you cannot actually mix in like that. So it's not a drop in fuel. So you need to change the fuel handling system of the site. But also the product has to be capable of actually operating with multiple fuels, right? So without any compromise.

So if you design a data center with a certain power output and so on, without making significant changes, you cannot just go and actually swap the fuel. So the D rates are different, the performance is different, and the cleansing response is different. But we are looking at each one of them. We are positive in terms of longer term, but we are still not clear about application data centers when it comes to methanol and ammonia in internal combustion engines.

But we are exploring those alternate fuels as good carriers for hydrogen, let's say, right? Because the biggest challenge with hydrogen right now is not just in the generation of hydrogen, it's how do you transport hydrogen and how do you store hydrogen? We looked at certain application for a three megawatt data hall, three megawatt backup application with storage for 24 hours. The storage itself was more expensive than the hydrogen fuels and it's going into multiple millions of dollars, right? So there's a lot of technologies and still innovation still yet to be had in terms of developed in terms of how hydrogen is produced green at a much more cost-effective manner, which I think the latest announcement from the Biden administration is going to help in setting up these massive hydrogen hubs around the country. But at the

same time, how do you transport the hydrogen and how do you store the hydrogen in a much more cost-effective manner? If not hydrogen, can you do it compressed without losing a lot of efficiency? Can you store it in a different like methanol or some other actually carrier that you can convert into a site of use. Those are some of the things that we're looking at. And again, our hypothesis actually is that for hydrogen or any other actually alternate fuel that will come in to take the place

of the internal combustion engine, the entire broader economy has to start using those fuels in much more higher quality, right? In real applications where you see the trucks, the trucks has to be working in fuel cells or hydrogen combustion engines and so on, before we would see a broader adoption and broader availability of the fuel that can really come and actually display some of the equipments and the technologies that we currently use in the industrial space. Govi, how does natural gas, you mentioned it briefly, is it pipeline and, you know,

going to be delivered that way, or can you store it as well? Both, both. Pipeline is the best way because you're talking about the scale, right? If you're talking about actually 10 megawatt, 12 megawatt, you can actually do a CNG or LNG station close by. And they can actually come and re-expand and put an expansion tank and actually use the natural gas from there. From the size of the campus you're talking about, right, it could be 300 megawatt, 400 megawatt. It's not a much more viable economic solution, right?

Then you have to go to actually a pipeline gas infrastructure. And again, the challenge is, is the infrastructure worth the usage, right? If economics, again, comes to play. In a HEO or a diesel backup, you can actually store it and you use it. I mean, I've gone to data centers where for five years, you go and actually look at how many hours the generators have been on, 30 hours, 30 hours, right?

But the requirement is when it is called upon, it has come every single time. On every one of those 30 hours it got asked, it needs to be on. That's right. Exactly. So for natural gas, if you're bringing in generators, again, the industry will evolve where the products will improve to meet the data center transient and the response requirements. So far, that's not been asked from the industry. I have complete faith in the industry and our industry partners that industry will step up. If natural gas is a solution that we're gonna be using data centers, we will react all together to actually get our products

to a state where the requirements of data centers, the application from transient response, from response in the startup time, everything can actually improve and meet the requirements. But that means that actually there has to be significant infrastructure investment and to get the fuel to the data center, infrastructure investment to get the fuel to the data center, to get the pipeline to the data center. And that depends a lot in terms of where the main trunk plane is and how far you can actually run the pipeline to the site and so on.

And the second question always comes in is actually, what is the reliability of the gas grid? Is it going to be as good? And if you're talking about Northern Virginia, you have like two, three gigawatts worth of actually power. If all of them switch to natural gas, and if power goes on, every single one of them actually come online, can the grid really support the amount of the fuel burn that is actually taking place in that, right?

Those are some of the questions that needs to be answered. And our view and our experience is actually is that there is no one silver bullet, right? And any progress is still a good progress. And that's the way we approach it, right? Hey, let's look at every one of them in its own merit. And it may not apply for every single site, every single place in the world when it comes to data centers.

But for a given data center application, a different site where the economics are different, where the availability of fuel is different, then the solution could be different. At the end of the day, is it better than actually the ultimate, right? Even 10% reduction in carbon intensity is still production, right? And if it's economical, let's go for it. And that's the approach we are taking. Govi, that's very helpful. Thank you. All right, let's take up one more subject. So AI, and I'd love for you to talk about AI, Govi, from two perspectives. One is,

you know, it's in the news. Everybody's talking about it. NVIDIA's going to own the world. GPUs are taking over. Everything's great. Generative AI is an incredible thing. So talk about it from a demand driver that you guys see inside Cummins. And then if you would, if you can give me two or three minutes on how you guys are using AI in your business. I bet there's some interesting tales inside Cummins for how you guys are taking all the information

that you know from all of the data points you have and all these gen sets out there to look at the data differently using AI. So can you give me both of those sides of the AI coin? So if I go back and remember the conversation that we're having with the customers back in 2022, even mid-2022, right, most of the demand that we were seeing

was driven mainly by the cloud adoption, right? And just the general digitalization of the world and the coming of the pandemic and so on. And then the chat GPT kind of actually brought home and accelerated a whole bunch. So since then, I would probably say that the general, like what we read in the news is real in terms of what we hear from our customers as well.

The demand and the magnitude of change now has gone up significantly i would say probably like two to three x over the next few years and i think the big wave is actually coming in terms of 2025 because the supply chain right there is a lag in terms of initiating the project to working through the land permits and everything and getting all the equipments in and and servicing and everything so from 2025 2026 we do see a significant jump in terms of number of data centers that are going up and, vice versa, the demand on our side as well. And just like everyone in the industry,

we are also ramping up our supply chain globally to meet that. By the nature of it, we are anticipating that most of the demand for AI driven, especially at the beginning, would be in North America and then slowly spreading over to other areas, including Asia-Pac and to Europe. And just by the nature of actually AI demand, there is a demand driven by training models and a demand driven by inference models. The training models are the first initial builds that are going on.

And what we're seeing in general is that most of the data center builds prior to the AI. They tend to be in the tier one, tier two cities where there's a lot of existing data centers, right? The cloud, the zone, the availability, and so on. But with the AI, we're starting to see that that is getting spread out where the data center is actually being built where they have good connectivity

and also good power and land available, right? It's not so much the data gravity that is putting them towards the major hubs around the world. And that kind of changes our perspective in terms of how we need to get ready ourselves to support the customers in the field because now it's going to be out of some place far away from where the main data center concentration is. So we need to make sure that we have local capability there and we're getting it to support the customers in there.

And there is also some discussion going on about if it's a pure play training data center, then what is the kind of reliability that is needed on the part? Because again, if, if, if you're, that is something that is being hotly discussed and debated. I don't know whether it's going to influence the longer term. I think the longer term forecast is about 10% to 12% of the data centers that are being built would be for training, and the rest would still be in inference

or it would be for mixed use, right? And in the case of training, do they really need actually the five nines of liability, or can they go with actually three nines, or can they go with two nines? And what does it actually mean in terms of the backup power requirements and so on? And are there anything that we can glean from the AI itself, right? But you can put in significant points where you start and stop without losing all the work that has been done as a mission critical, similar to what you see in other applications, right?

So there's a lot of things that are going on. So that demand, we're still trying to understand how it's going to play out but we still believe the magnitude of what is coming in is is huge because i mean second one is um you ask how we are using within comments right and it's a good classic example of how ai is starting to infuse and improve our productivity in real value right and just take for example zoom calls the team calls right there is a summary button there's the ai button that is clicking in and in comments we are starting to using use it quite regularly. And you start it at the beginning. And by the time you're done, it can actually produce an amazing summary of the context

of the conversation about who said what, not as a transcript, but in terms of summary, followed up with like action items. So nobody can miss, hey, I didn't sign up for it, right? So that is a good example of, I mean, because Cummins, we are, as you mentioned, right, we are one of the largest diesel engine manufacturers in the world. And our engines are used in very different applications, right? In on-highway, off-highway, mining, marine, and power generation, oil and gas, every single conceivable application that we can. And there is a lot of data coming in, right?

And definitely mechanical engines, electrical engines, there is a lot of work going on to make sure that we something goes wrong we diagnose and fix it and so on just like any of the company all this data was sitting in different pockets in different information databases and so on there are some work that is going on to say hey can we deploy ai to go and process that and try to bring it together and see can we connect the dots that we may be missing because the same person is not looking at two or three different files, right? So those are real life examples. And if you look at telematics, for example, right? Telematics is a good example there. Most of the applications that are coming up right now are not really meant for stationary power, right? Because if you look at the telematics and most of the investment investments going in, how do we increase the efficiency of the product?

How do we reduce the fuel consumption? How do we ensure that actually we can predict the reliability of when it's going to fail so you can actually proactively interfere and so on? But that is designed towards applications where the products are running all the time. In data centers, it doesn't really matter. What all matters is actually is that, hey, when I really would like the product to come up and run, will it run or not?

So the mindset itself is completely different. It's not about efficiency. It's about reliability to start. So we are leveraging quite a bit of our partners to actually go and explore. Can we understand the application, the limited data that you have to predict when the next failure will be happening, right? Or when something like proactive intervention is required so that we can assure that it's going to be starting when it is called upon to start.

So those are some of the areas where I see a lot of AI coming in, machine learning coming in to enhance how we're doing. And the same thing that I think is actually every single industry is going through as well. Govi, I really appreciate you reminding me. Obviously, I'm in the data center business. I think of Cummins and I think of power generation in the data center space. But man, I forget you guys have marine applications

and you have so many other uses for your generators. I appreciate getting reminded of that, that it's a big business. It's a big world out there. And we in the data center space are just a slice of it, supporting it. My friend from the land of 10,000 lakes and my fellow Auburn Tiger, Govi, I really, really appreciate you spending a few minutes with me here and letting us talk Cummins and talking data centers and getting a little Auburn football in while we did it. So thank you for that. And I hope I can recruit you in my NCAA letter writing campaign

to get our 2004 national champion finally recognized. Oh, I will, I will. Thanks a lot, Raymond. I appreciate you having me here. And it is a dynamic industry and super excited to be here and working with each of our latest customers in figuring out what we can do to improve the industry in general.

Yeah, we're both lucky guys to get to be in this space at this time, that's for sure.