Cold logic about the future of data

AI's future lies in cold climates, as heat management becomes crucial. India faces challenges balancing data sovereignty with processing costs.

Inside a cavern cut into a Norwegian fjord, the air is so cold and so still that it feels suspended. The place once stored mining gear. Now it stores something far more volatile. Rows of processors glow in the dark, running day and night. They burn so hot that without the Arctic wind pressing against the rock, they would buckle under their own heat.

Representational image.

This is where the future of intelligence is being built. Not in Silicon Valley. Not in Singapore. In the quiet cold of the north, where the thermometer decides what machines can and cannot do.

For a while now, the world’s biggest technology companies have been shifting their most demanding AI workloads toward the Arctic Circle. They are not doing it for romance or spectacle. They are doing it because heat is the enemy and cold is the cure. Not consultants but physics wrote it.

How do we make sense of this? Metaphorically speaking, AI is energy turned into thought. To do that, electricity must enter a chip. The chip then calculates. But the calculation produces heat. And when done at scale, the heat becomes overwhelming. Cooling stops being a supporting act. It becomes the main cost. In Norway or Iceland, nature pays this bill. In India, the atmosphere sends the invoice.

This is the collision India faces now. Last week, the Digital Personal Data Protection Rules came into effect. At its core is a simple idea. Indian data must live in India. It feels right. It sounds sovereign. If something is created by Indians, why should it leave the country?

The problem with AI is that it does not care about sentiment. It cares about thermodynamics. If India insists that both data and its processing remain within its borders, the cost of that will rise fast. A data centre in Gurugram must battle summers that hit 45 degrees. As opposed to that a centre in Finland or Norway simply breathes. One fights nature, the other uses it. The gap shows up in the electricity bill and then everywhere else.

Yet much of our public debate treats data like gold. Solid. Still. Locked in a vault. But real digital systems do not behave that way. Amit Ranjan, who helped build Digilocker, explains it bluntly. “The idea of data sitting peacefully inside India is a red herring.”

He goes on to explain that in live operations, systems constantly check whether data is safe and consistent. To do this, they sometimes make quick, temporary copies on servers abroad. These copies last for moments. They complete their job and vanish. You cannot run a national-scale system without this. This is why data protection laws everywhere include narrow space for such technical transfers.

But this nuance rarely shows up in political messaging. It is not a deception. It is simplification for a public that wants reassurance. The internet was built for movement, not stillness. It breathes by replication.

A senior executive at one of India’s largest telecom and technology firms added another piece of the puzzle. The government has already classified what counts as sensitive data. That category never leaves India. No one disputes this. But outside that narrow slice lies a vast universe of ordinary data that powers maps, language tools, streaming platforms, search engines and AI services. This data creates enormous heat when processed.

To handle this without violating sovereignty, Indian firms are turning to digital embassies. These are data centres in friendly cold countries that are treated as Indian jurisdiction through treaty or contract. They sit abroad, but the law governing them is Indian. The climate cools the machines. The sovereignty remains intact.

It is a simple idea with a powerful logic. Keep what is vital at home. Send what is heat-heavy to places that can cool it naturally. Protect the crown jewels. Let geography handle the rest. It turns sovereignty into a strategy, not a slogan.

India is not alone in this struggle. Every tropical nation will face the same arithmetic. Brazil. Indonesia. Much of Africa. AI is reintroducing geography into an age that believed geography no longer mattered. The internet flattened the world. AI is beginning to restore its contours. Heat has become a boundary. Cold has become a resource.

Which brings us to the First Principle of this moment. A country can protect its data. It can classify it. It can legislate around it. But it cannot repeal physics. It cannot instruct heat to behave differently.

The nations that understand this early will win in the next decade. They will build smarter digital architectures. They will divide data wisely. They will treat climate as infrastructure. And they will see that the path to sovereignty sometimes runs through colder lands.

India has the ambition and the talent for this era. What it needs now is clarity. Guard what is sensitive. Be pragmatic about what is not. Build alliances with colder partners. Let the thermodynamics do what they have always done.

The age of AI will reward those who master code but it will reward even more those who respect the thermometer.