Data centers are the physical internet

From CFACT

By David Wojick

Building new data centers has become highly controversial. This massive public debate suffers from a major confusion in that what data centers do is seldom mentioned, except that they do AI, which is also controversial.

The vague name “data centers” itself contributes to the confusion. It sounds like they just store a lot of data, and what good is that?

In reality, they should be called internet centers, because much of the internet’s essential processing occurs there. Internet processing is the primary function of data centers. You cannot logically love the internet and hate data centers as they are the same thing. A data center is a chunk of the internet in a box.

The big problem is that most people have no idea how the internet works, so here is a highly simplified look at it.

The core process is called packet switching, and it is amazing. It was originally developed as a “bomb proof” defense communication technology because message traffic takes no fixed route that can be knocked out.

To take a simple case, let’s say you email someone an Acrobat document. You might think it just travels to them like physical mail, but it is very different. First, the email and the document are broken down into small pieces called packets of data. Keep in mind that to a computer everything is just a structured bunch of ones and zeros, so it can readily be taken apart and put back together.

Then, come specialized computers called routers, which data centers are packed with. The sending computer puts out a call for available routers, which respond from many data centers. It picks one and sends it a packet. This process continues until all the packets have been sent to routers. These routers repeat this forwarding process until all the packets reach the final destination. Here the computer reassembles the email and the document so it can be viewed.

The immense value of this complex technology is that it does not require dedicated lines from sender to receiver. This routing process is also true for looking at and communicating with World Wide Web stuff that is running on a server computer somewhere. The web page you are looking at is sitting as ones and zeros on a server somewhere, sending you a picture version of itself.

Data centers are where most of the internet’s routers, switches, and servers are housed. The internet comes in big boxes. So, while you might not want a big box of internet in your neighborhood, you cannot reasonably use the internet and say data centers are a bad thing.

As for AI, it is not the first big technology to make the internet grow rapidly over the last fifty years. Personal computers and smart phones are two prior examples.

AI is extremely useful for certain internet tasks, such as searching and analyzing large numbers of documents. It saves me a lot of search time that I can then spend doing more research. AI can greatly improve the productivity of certain tedious tasks. Its growth is certain.

Mind you, the tremendous rapid growth in data centers being touted and causing great anxiety is likely a bubble of hyperbole. Like the dot-com investment bubble that burst in 2000, the projected growth is impossible. Growth will be sharply constrained by available electricity generating capacity.

But in the meantime, the public debate will no doubt continue. It would help if people understood that data centers are primarily the home of the physical internet, which needs to keep growing.

Calling data centers “internet centers” might help the policy debate.

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January 27, 2026 2:15 am

Yes, clearly made point very worth making.

ResourceGuy
January 27, 2026 2:28 am

Rapid growth of huge behind the meter power stations will continue while the debate and blame game over impact on electricity rates spins on independent of facts but useful for politics.

David Wojick
Reply to  ResourceGuy
January 27, 2026 3:46 am

Behind the meter power does not work because getting a 100% capacity factor is too expensive.

January 27, 2026 2:47 am

I don’t see the point of this ‘article’. A misunderstanding? So what?
Isnt the main issue simply limited energy and where it goes, whether you call it a data or computer centre?

Tom Halla
Reply to  ballynally
January 27, 2026 3:12 am

The level of technological illiteracy is astounding. As in, most green voters.

Reply to  ballynally
January 27, 2026 3:34 am

Yes, It isn’t very clear. But what is driving power consumption is neither Internet routing nor data storage, it is actual computer programs used to analyse data, so you get the next useless gadget you never knew you didn’t want, presented as a must-have advertisement in your online surfing…

The unexpected upside of this is that big CPU centres are going to need nuclear power stations to run them, and the extra heat and electricity will be significant grid providers and useful for places needing low grade heat like office blocks or homes or greenhouses growing marijuana and lettuces in e,g., Alaska… 🙂

And there is so much money flooding into AI that politicians and green groups will be bought off, regulations will be slackened and those nuclear power stations will actually get built.

I suspect te ‘new industrial towns’ will be built where cooling water exists and no one has a stake already…places like the Arabian peninsula with lots of sea water and bugger all else,.. An integrated data centre and desalination plant could create an oasis…

And even failing post industrial towns, provided they are build on a river or lake could be revitalised with small nuclear power stations to provide cheap energy for raw industries like aluminium smelting and so on,. as well as data centres.

Conservatism is ultimately a policy of keeping what works, and only changing what is necessary to achieve a better life etc. etc.

So dumping woke, which has done no one any good, in favour of nuclear power would seem to be in the proper conservative tradition.

January 27, 2026 3:17 am

Well there is a nuanced difference between a dark office running internet routers and a fully equipped data centre, in that internet nodes store no data beyond that actually in transit.

There is a difference between the connectivity aspect of the Internet – wires fibres and routers – and the data that are accessible via the Internet. Servers and clouds.

That is. the computers running web servers, and centralised cloud technology. The latter are in fact what ‘data centre’ usually means.

Of course there is nothing to stop both functions going into one building….

observa
January 27, 2026 4:05 am

Well if the fickles aren’t up to scratch we can always load shed the internet centres-
AEMO data shows demand at peak of yesterday’s heat exceeded supply for South Australia – ABC listen
10:30PM and 72% dinojuice across the NEM grid-
AEMO | NEM data dashboard