Microsoft’s new ‘Fairwater’ megafactory aims to revolutionize AI training — how the world’s most powerful datacenter works

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Microsoft recently introduced Fairwater, its biggest and most powerful AI data center yet, which is situated in Wisconsin.

Fairwater is the first in a series of similar datacenters being built in the U.S., with additional projects planned for Norway and the UK.

These facilities represent a massive investment – tens of billions of dollars and hundreds of thousands of powerful GPUs. Microsoft plans to connect them all, forming a worldwide Azure AI data center that functions like a giant, distributed AI supercomputer.

AI datacenters are specifically designed for a different purpose than regular cloud facilities. Traditional cloud centers handle lots of small jobs, such as running websites or email. AI datacenters, however, dedicate all their power to a single, huge task: training very large AI models. Instead of working separately, all the servers are connected and function as one powerful supercomputer.

These systems use NVIDIA’s GB200 GPUs, and even more powerful GB300 GPUs are coming soon. These new GPUs can perform calculations up to 10 times faster than today’s top supercomputers, handling trillions of equations per second with incredible efficiency.

The system’s processing power is truly impressive. It can handle 865,000 tokens every second – tokens being the small units of text, images, or video that AI uses to learn. By cleverly combining the memory of multiple GPUs, the system maintains a smooth and consistent performance without any slowdowns.

Facilities like these likely have very high energy bills, and that’s a concern as more of them are built. It’s unfortunate that nuclear power wasn’t used more often, as worries about safety prevented it from contributing more to projects like this one.

Microsoft is addressing environmental concerns by using a unique liquid cooling system at its Fairwater facility that doesn’t waste any water. Unlike traditional air conditioning, this system uses sealed pipes to circulate liquid, continuously cooling the servers and then reusing the liquid repeatedly.

As an analyst, I’ve been looking into Fairwater’s operations, and one thing that really stands out is their cooling system. They utilize a massive water-cooled plant, but impressively, around 90% of its capacity is cooled using air – meaning they don’t need to add any fresh water for that portion. It’s a really efficient way to manage temperatures.

Fairwater is designed to store massive amounts of data – we’re talking billions of gigabytes, or an exabyte. It’s also incredibly fast, capable of processing millions of data requests every second, which is crucial for keeping up with the needs of artificial intelligence training.

While keeping data centers cool is important, the real issue is the massive amount of electricity AI uses. These facilities consume enough energy to power hundreds of homes for an entire year. To lessen the environmental impact, Microsoft is investing in carbon credits – 3.5 million of them – through a 25-year partnership with Re.green, starting in January 2025.

The big vision

Microsoft has a bold plan: not only create massive data centers for AI, but connect them all together as a single “AI Factory.” This means the Wisconsin facility won’t work in isolation; it can share resources with centers in places like the UK and Norway. The idea is to create a more dependable, scalable system that can efficiently train large AI models across different parts of the world.

Microsoft compares the current wave of artificial intelligence to the industrial revolution. Just as factories drove economic growth by mass-producing goods, Microsoft believes AI datacenters will do the same – but instead of making products, they’ll generate “intelligence.”

While this is a remarkable achievement, I’m concerned about its lasting effects on the environment. I was raised to be mindful of my own environmental impact, and it’s hard to ignore the potential cost of projects like these. Renewable energy is a good step, but I also believe we should give nuclear power more serious consideration – it’s a safe, dependable, and clean energy option.

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2025-09-23 17:40