An Asia Economy report says Nvidia is betting on data center power distribution, with a 'shrink the power room, fit one more server' approach.
NVIDIA is rapidly reshaping power infrastructure standards by shifting the power distribution systems of AI data centers from conventional alternating current (AC) to direct current (DC). The move is intended to reduce transmission losses and improve energy efficiency. Some analysts, however, say its main purpose is to reduce the physical space occupied by power equipment. The strategy is to maximize profitability by filling the freed-up space with more of its high-margin server racks.
According to industry sources on October 24, NVIDIA has internally set 1,500V DC as the ultimate goal of its AI data center power distribution roadmap and is exploring ways to implement the technology and bring it to market. The strategy is seen as an effort to establish 800V DC as the foundation of AI data center power distribution in the medium to long term, and then to make 1,500V DC the next-generation standard when the era arrives in which power consumption per rack exceeds the megawatt level.
1,500V is the upper limit of the low-voltage direct current (LVDC) standard that can maintain the insulation and safety of wire coverings. When the adoption of DC power distribution was first discussed, experts initially viewed 750V, midway between lower and higher voltage levels, as the next-generation standard, citing safety concerns among other factors. However, after NVIDIA proposed 800V DC as the next-generation power distribution standard, companies across the related industries have shifted their development plans toward 800V-based products.
An industry official said, "Power standards have traditionally been set conservatively, with European academic organizations such as the International Council on Large Electric Systems (CIGRE) taking the lead and verifying grid stability over extended periods. But the situation has changed. Big Tech companies with market dominance, such as NVIDIA, are now taking the lead in discussions on technical standards from academia."
Analysts say NVIDIA's aggressive push to raise power distribution standards is driven by business calculations aimed at maximizing the use of data center space.
Existing AC-based facilities required large transformers to step down the high-voltage power coming in from outside. Rectifiers for converting AC to DC and thick three-phase AC busways also took up considerable space. The situation changes when a DC distribution network is installed and solid-state transformers (SSTs) are introduced. Transformer equipment and power conversion devices can be reduced to compact modules, and simpler wiring routes cut copper wire requirements by more than 32%.
When the space occupied by AC equipment shrinks, data center operators can fill the remaining area more densely with high-value server racks. This makes it possible to maximize both computing capacity and revenue within the same building footprint. That, in turn, directly benefits NVIDIA, which supplies server racks to data centers.
An industry official said, "The key to switching to DC is not simply reducing power consumption compared with conventional AC; it is the dramatic reduction in the volume of equipment. NVIDIA can use the space saved in power rooms to install more server racks, each costing tens of billions of won. That's why NVIDIA is committed to DC power distribution."