Email Jim at jim.thompson@ipulpmedia.com

Last week, this column was titled, "The New Competitor for Power." I discussed the proliferation of data centers and their huge demand for power and cooling water. My thoughts were that we in the paper industry could see them as competitors, or, if we are clever enough, collaborators. My column straddled the fence and left the reader with a "on the one hand, on the other hand" wishy washy set of conclusions. Sorry.

Yet it does leave each mill with a difficult set of decisions. You will have to ask yourself, "When it comes to data centers, does my mill have an offering that would make cojoining with a data center an economic win?" There is not a one size fits all answer. Each case will have to be examined individually.

Now I am going to make the decision harder for you. While I was pondering all of this, I happened to look at the Apple Watch on my wrist. I went to ChatGPT and asked, when compared to all the computers that existed in the world in 1970, how does my Apple Watch compare? The answer: One Apple Watch has 50,000 times the computing power as all the computers that existed before 1970.

I then asked ChatGPT to estimate the number of Apple Watches it would take to match the reported computing power of Elon Musk's announced data center in Memphis, Tennessee. The answer was wide ranging because the available data center information is not precise: 378 million to 3 billion Apple Watches.

The purpose of this casual speculation was to see if we could get a reasonable guess as to when data centers would be obsolete. For if you go back to 1970, computers were huge, in special rooms, and had their own air conditioning. This sounds much like the data centers described today. The question is, when will today's data centers fit on our wrist?

Likely not as fast as one might think. For although Moore's Law has worked well up until this point in time, it is about to run out of runway--we are reaching the limit on how compact chips can be made with current technology. Quantum computers can take us further, but they are not out of the lab yet.

Then I asked an expert--Nikhil Shirke, of Siemens Energy. His answer was "make hay while the sun shines." I liked his farming analogy, and I respect his answer. In other words, whether data centers will shrink at the same rate as computers have in the past is unknown. Don't miss today's opportunity by being too timid.

You need to study the impact of data centers on your mill today--are they a threat or an opportunity?

Be safe and we will talk next week.

For a deeper dive, go here.

Study Guide: Data Centers and the Paper Industry

This study guide is designed to review and reinforce understanding of the provided text, which explores the relationship between the paper industry and the proliferation of data centers. It includes a short-answer quiz, an answer key, a set of essay questions for deeper analysis, and a glossary of key terms.

Short-Answer Quiz

Instructions: Answer the following questions in 2-3 complete sentences, drawing your information directly from the provided source text.

1. What was the central theme of the author's previous column, titled "The New Competitor for Power"?
2. According to the text, what two potential roles can data centers play in relation to the paper industry?
3. What critical question must each paper mill ask itself when considering a partnership with a data center?
4. What comparison does the author use to illustrate the massive increase in computing power over the last several decades?
5. In what specific ways are today's data centers similar to computers from 1970?
6. What speculation does the author make about the long-term future of data centers, based on the history of computers?
7. What technological principle is described as "about to run out of runway," potentially slowing the miniaturization of computing?
8. What future technology is mentioned as a potential solution to current technological limits, and what is its current state of development?
9. Who is Nikhil Shirke, and what advice did he offer regarding the opportunity presented by data centers?
10. What is the author's final call to action for the paper mills reading the column?

Answer Key

1. The previous column's theme was the proliferation of data centers and their significant demand for power and cooling water. The author, Jim Thompson, discussed whether the paper industry should view these centers as competitors or potential collaborators.
2. The paper industry can view data centers as either competitors, presumably for resources like power, or as collaborators. The author suggests that a clever approach could lead to a collaborative relationship.
3. Each mill must ask, "When it comes to data centers, does my mill have an offering that would make cojoining with a data center an economic win?" The text emphasizes that there is not a "one size fits all" answer to this question.
4. The author compares the computing power of his Apple Watch to all the computers that existed in the world before 1970. He reports that a single Apple Watch has 50,000 times the computing power of all pre-1970 computers combined.
5. The author notes that computers in 1970 were huge, were housed in special rooms, and required their own air conditioning. This description sounds very similar to the large-scale data centers being built today.
6. Inspired by the miniaturization of computers into a device like an Apple Watch, the author speculates about when today's massive data centers might become obsolete by shrinking to fit on a person's wrist.
7. Moore's Law is the principle described as nearing its limit. This is because we are reaching the physical limits on how compact chips can be made with current technology.
8. Quantum computers are mentioned as the technology that can take computing further than current chip technology. However, the text notes that they "are not out of the lab yet," indicating they are still in the experimental phase.
9. Nikhil Shirke is an expert from Siemens Energy. His advice was to "make hay while the sun shines," which the author interprets as a recommendation not to miss the current opportunity presented by data centers by being too timid.
10. The author's final call to action is for each mill to study the impact of data centers on its specific operations today. The goal of this study is to determine if data centers represent a threat or an opportunity for that particular mill.

Essay Questions

Instructions: The following questions are designed for longer-form, essay-style answers. Use the information and arguments presented in the source text to construct a thorough and well-supported response.

1. Analyze the author's dilemma regarding whether data centers are a "competitor" or a "collaborator" for the paper industry. Based on the text, what factors might a paper mill need to evaluate to determine if a collaborative, "cojoining" relationship would be an "economic win"?
2. Discuss the analogy between computers of 1970 and modern data centers. How does this comparison frame the author's speculation about the future obsolescence of data centers, and what is the central question this analogy raises?
3. Explain the concept of Moore's Law as presented in the text and detail its implications for the future of data centers. Why does the author suggest that the historical rate of technological miniaturization may not continue at the same pace?
4. Interpret Nikhil Shirke's advice to "make hay while the sun shines." How does this statement serve as a counterpoint to the author's speculation about the potential long-term obsolescence of data centers, and what course of action does it recommend for paper mills in the present?
5. The author states that for each mill, considering a partnership with a data center involves a "difficult set of decisions" and that "each case will have to be examined individually." Synthesize the arguments in the text to create a balanced overview of the threats and opportunities a paper mill should consider when conducting this examination.

Glossary of Key Terms

Term Definition from Source Context

Cojoining The act of collaborating or joining with a data center in a way that creates an "economic win" for a paper mill.

Data Centers Large-scale facilities characterized by a huge demand for power and cooling water. They are compared to computers from 1970, being described as "huge, in special rooms, and had their own air conditioning."

Moore's Law A principle describing the historical trend of technological miniaturization. The text notes that while it has "worked well up until this point in time," it is now "about to run out of runway" as current technology reaches its physical limits for making chips more compact.

Paper Industry The industry to which the author's column is addressed, composed of entities such as paper mills. The central question is how this industry should engage with the rise of data centers.

Quantum Computers A future technology that could potentially overcome the limits of current chip technology and allow for further miniaturization. The text states they "are not out of the lab yet."

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