Why tech companies are looking to Kamloops for AI server farms

As tech companies across the world continue to invest in artificial intelligence, two Canadian giants are looking at Kamloops for server farms.

It’s not the first time tech companies have chosen Kamloops to host the electricity-hungry machines that power the technology, with Telus already owning one data centre on Bunker Road. Both Telus and Bell could expand the technological footprint in Kamloops for specific reasons.

“Kamloops continually gets chosen over other locations throughout BC, including the Okanagan,” Kamloops Councillor Mike O’Reilly said.

Three main factors won Kamloops the two Bunker Road data centres more than a decade ago — low risk of seismic activity, power availability and connections to major fibre optic networks along Canadian railways.

“These are the reasons why we have data centres. We didn’t just happen to win. These are very purposeful decisions as to why they’re coming here,” he said.

The Okanagan — Central Okanagan more specifically — is famously short on power. Telus wants to expand its data centre as part of what it calls its Sovereign AI project, which includes another project in Quebec.

It’s one of three major AI projects, with telecom competitor Bell partnering with Thompson Rivers University to build two new data centres in the coming years. One is already open.

O’Reilly is one of several city officials who will meet with Telus this week to be briefed on plans to expand the company’s Bunker Road data centre.

But, Kamloops isn’t the only place where investors are looking to put money into new facilities. A businessman in Kelowna has drawn up plans for one in the Okanagan and Bell is looking to build two in Merritt, for example.

While the technology is rapidly advancing, server farms need massive amounts of both power and water. The province announced measures last fall that would require tech companies to bid for power use, but it’s not clear how the province is addressing their water consumption.

It’s also not clear how much water, used for cooling, the Kamloops facilities might need.

CBC reported two Ontario facilities, for example, will each use around one billion litres of drinking water per year. The Kamloops water treatment plant, meanwhile, produces around 18 billion litres annually.

O’Reilly said he’s not yet concerned about the water impact.

“Certainly the amount of water data centres historically use has been fairly high, but when we look at a technology that’s changing, there are data centres going toward significantly less water, if not water-free for their coolant,” he said. “When you look at running a business you try to cut costs, and I’m sure water is a cost these companies are wanting to cut. Again, technologies evolve.”

In a written statement, Telus said its “natural cooling systems” will reduce water use by 75 per cent compared to other data centres. Though the company didn’t provide an estimate, a spokesperson said the building will only have to be cooled 40 hours per year.

With AI-oriented, or large language model, data centres already eyed for Kamloops, and a few other server centres already operating, O’Reilly said Kamloops could be a major hub for growth in the tech industry in the years ahead.

“I think AI is going to play a big part in the world going forward and Kamloops can play a big part in that. I hope it’s something we can grab on to. It’s one thing being the Tournament Capital of Canada, we could be the AI Capital of Canada, as well,” he said.