- The AI explosion has triggered a boom in data-center building.
- Giant new complexes are scheduled to go up everywhere from Ohio to Georgia.
- The growth could put data centers in competition with local populations for space and resources.
I want to draw your attention to this photo.
This part of Virginia used to be farmland. Now, it's home to a tony cul-de-sac with spacious driveways, pristine lawns, and light-colored mansions.
And right there, a stone's throw away from some of these residential properties, is a hulking great Amazon data center.
This scene, from the Loudoun Meadows neighborhood in Aldie, Virginia, could be about to become more common.
As my colleague Dan Geiger reports today in an excellent story on a data center development boom, the AI explosion has triggered a surge in investment in these warehouse-like complexes.
Jonathan Gray, the president of alternative investment giant Blackstone, noted on a company earnings call that tech giants are expected to invest $1 trillion over the next five years in AI, with most of that going to data centers. Dan's story details new builds going up everywhere from Ohio to Georgia to Texas to Nevada to Utah.
And while many of these builds are in rural or lightly-populated areas, some are popping up in close proximity to major cities, like Phoenix, Atlanta, or Reno.
For example, DataBank, a data center provider backed by investment firm DigitalBridge, is putting smaller data centers in the suburbs of "tier two and tier three cities," CEO Marc Ganzi told my colleague Ellen Thomas.
Unlike e-commerce warehouses, these data centers don't add a bunch of traffic to the roads, and they're pretty quiet. But they do require a lot of resources. And I mean A LOT. To put it in perspective, here's a section from Dan's story:
A spokeswoman for APS, the utility in Phoenix, said that it has received requests to connect new data centers whose power requirements are equivalent to "roughly 560,000 Arizona homes over the next eight years."
"That far exceeds our available generation resource and transmission capacity in the Southwest region during that time frame," the spokeswoman said.
560,000 homes! In addition, they require a lot of water to keep the computers cool.
As a result of limited generation capacity in places like Arizona and northern Virginia, these data centers are popping up anywhere where the local utilities can support them.
Depending on where you live, you might soon have to say hello to a new power-hungry next door neighbor.