Behind every smart AI application lies an AI Factory manufacturing intelligence. Credit: Shutterstock Artificial Intelligence (AI) is rapidly reshaping how we live, work, and learn. From voice assistants and recommendation engines to generative chatbots and self-driving vehicles, AI is now a core part of everyday life. But behind every smart application lies something often unseen: infrastructure. That infrastructure is called an AI Factory. AI Factories aren’t just clusters in the cloud. They are real, physical environments, purpose-built data centres designed from the ground up to support the world’s most demanding AI workloads. Where traditional facilities host websites or store files, AI Factories train, run, and refine advanced models by converting massive volumes of raw data into real-time intelligence. They are the new production lines of the AI era: manufacturing insight instead of goods. At their core, AI Factories deliver extreme power, precision cooling, and ultra-fast connectivity. These aren’t upgrades; they’re the foundational infrastructure of the AI economy. If you’re in cloud, colocation, or enterprise IT, understanding what makes an AI Factory different is critical to staying competitive. AI Factories: the power plants of intelligence Just as cities rely on centralised power plants for energy, AI relies on centralised infrastructure to deliver intelligence. AI Factories combine thousands of high-performance processors (GPUs), ultra-fast interconnection, and advanced cooling systems to run AI workloads at industrial scale. They’re built to: Train advanced models using vast datasets Deliver real-time inference at scale Support GPU clusters requiring intensive power, cooling, and performance Bottom Line: AI Factories are not just next-gen data centres. They are the power plants of digital intelligence. NEXTDC What makes an AI Factory different? AI Factories mark a fundamental shift in infrastructure design. Unlike traditional data centres, they’re engineered for the scale, complexity, and performance AI demands. Key differentiators include Specialised AI Hardware Thousands of GPUs and AI accelerators (e.g. NVIDIA Hopper, Blackwell) AI-optimised CPUs like NVIDIA Grace AI-Centric Software & Orchestration Full-stack platforms like NVIDIA AI Enterprise Built-in scheduling, monitoring, and optimisation tools Extreme Power Density 100kW to 600kW per rack Electrical systems optimised for full-load performance Advanced Cooling Systems Liquid cooling and immersion solutions Energy-efficient thermal design High-Speed Interconnectivity InfiniBand and NVLink fabrics for low-latency data flow Scalable, Sustainable Architecture Modular design with support for sovereign and net-zero goals Bottom Line: AI Factories are intelligence-first. If your infrastructure can’t support this shift, you risk falling behind. Traditional data centre vs AI Factory Feature Traditional Data Centre AI Factory (NEXTDC-Ready) Primary Purpose Apps, storage, websites AI training, inference, machine learning Hardware Inside CPUs, some GPUs Thousands of AI-optimised GPUs and chips Power Per Rack 5–15kW 30–600kW+ (NEXTDC supports today) Cooling Method Air-based ventilation Liquid, direct-to-chip, immersion Speed of Network Standard networking High-bandwidth, ultra-low latency fabric Scale of Compute General-purpose servers GPU clusters managed, monitored, orchestrated at scale Bottom Line: Traditional data centres offer versatility. AI Factories offer intelligence at industrial scale. What workloads do AI Factories support? AI Factories are built to handle the world’s most computationally demanding tasks. 1. Model Training Teaching AI to understand patterns, predict outcomes, and reason at scale: Language models (e.g. ChatGPT) Medical image analysis Autonomous driving systems 2. Inference at Scale Deploying AI to make real-time decisions: Product recommendations Chatbots and assistants Smart surveillance and object recognition 3. High-Performance Simulations Powering AI-enhanced simulations: Drug discovery and genomics Financial modelling and risk analysis Climate forecasting and energy grid management Bottom Line: AI Factories are not general-purpose. They’re purpose-built for high-stakes, compute-intensive AI workloads. The AI Factory era has arrived AI Factories are already live and redefining infrastructure across industries. They enable faster deployment, higher reliability, and scalable AI operations. As power densities, cooling requirements, and compute demands rise, traditional infrastructure is reaching its limits. What’s Next: Why AI Factories Matter Now 600kW+ rack power is becoming standard AI-specific chip architectures are evolving fast Cooling and interconnect innovation is a must NEXTDC is building the infrastructure behind Australia’s AI future. With NVIDIA-certified facilities, sovereign-grade security, and national reach, NEXTDC supports everything from GPU-as-a-Service to sovereign AI deployment. Whether you’re scaling Neo Cloud, building national capability, or launching new services, our infrastructure gives you the power to scale confidently. Ready to build your AI Factory? and start powering what’s next. NEXTDC SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe