Layer 1 · Physical & Energy

The power, cooling, buildings and chip factories that everything else physically runs on.

In simple words: The power stations, cooling and chip factories that every AI needs before it can think at all.

Draft, awaiting expert review, reviewed 2026-10-02

Like: The land, roads and power lines of a city: invisible until they run out.
Where it breaks: Roads can be widened in months. Chip factories and grid connections take years and enormous investment, and advanced chip production is concentrated in very few places, so this layer can bottleneck the whole stack at once.

What it gives the layer above

Electricity, cooling and floor space, plus the fabricated chips themselves.

What it needs from the layer below

Nothing in the AI stack: it rests on energy markets, land, water and industrial supply chains.

Concepts

• Grid connection & energy supply
  A big AI data centre needs a large, steady supply of electricity, and getting connected to the grid can take years, so power, not chips, often decides where and when one gets built.
• Power & cooling for AI data centres
  AI data centres are limited by how much electricity they can get and how much heat they can remove.
• Liquid cooling
  AI racks pack so much power into a small space that fans and cold air can no longer carry the heat away, so water-based cooling is piped right up to the chips.
• Fabs & the chip supply chain
  Advanced AI chips depend on a handful of highly specialised factories, tools and materials.
• Energy per token
  Each answer a model gives costs a little electricity, and how much depends on what you count: the chips, the rest of the server, idle machines and the building's cooling.

Walkthrough

1. An answer starts as electricity. Someone asks a chatbot a question. Before any maths happens, the data centre needed a grid connection big enough for a town, which took years to secure.
2. Power in, heat out. The electricity flows through substations to racks of AI chips, and nearly all of it turns into heat while the chips work out the answer.
3. Liquid carries the heat away. Those racks are so dense that air cannot keep up, so liquid flows through plates on each chip and carries the heat outside.
4. Chips from a handful of factories. The chips doing the work came from a few specialised fabs and packaging lines, which is why supply can run short.
5. The bill for one answer. Add up the chips, the server, idle machines and cooling, and you get the energy per token. Making that smaller stretches every megawatt the grid can supply.

Examples

• Data-centre campuses
• Grid connection queues
• Direct-to-chip liquid cooling
• Semiconductor fabs
• Energy per token and PUE