Chipmaker says data centers should report energy waste

Communities and governments should demand AI data center providers report how much energy they are wasting, rather than put blanket bans on the facilities, the CEO of chipmaker Onsemi told Semafor.

Data center moratoriums like the one enacted in New York are “short-sighted,” Hassane El-Khoury said during a tour of the company’s manufacturing facility in East Fishkill, New York. Instead, he said, policymakers and critics should identify specific problems they want to address, rather than shun the AI infrastructure buildout as a whole.

“A lot of the pushback is coming from a lack of awareness of what the subject matter is and the problem at stake,” El-Khoury said.

Onsemi makes power chips, which convert energy surging through data centers, cars, and factories. They essentially act as hyper-fast electrical switches that shrink grid-level power down to the tiny voltage that chips run on. More efficient power conversion reduces the amount of electricity that data centers would otherwise lose as heat, which requires more water to cool servers.

Pushback against data centers has swelled in part because of concerns that they will strain local grids and raise residents’ electricity bills, and drain local water supplies.

El-Khoury said the company is talking to federal and state lawmakers — starting in Arizona, where Onsemi is based — to discuss energy transparency standards for reporting how much raw energy a data center is consuming and how efficiently it’s using that power.

For example, if a hyperscaler announces a 1-gigawatt facility, that number typically refers only to how much electricity the facility is designed to consume. A more useful standard, Onsemi argues, would measure how much AI compute it can generate, compared with the amount of power it draws from the grid.

He said public opposition — including the moratorium in New York, where Onsemi’s most advanced facility is located — isn’t slowing down demand for data centers. “On an earnings call last month, the company, which has a nearly $28 billion market cap, said AI data centers are its fastest-growing business, with revenue expected to more than double this year.

“I’m not saying you should accept the AI data center right in your backyard,” he said, but “I think any community needs to take a step back and say, ‘Why are we pushing back?’”