Nearshore Americas

AI is Fueling Data Center Bonanza in the US

Data center demand is skyrocketing in the United States, as companies across industries embrace generative AI models like ChatGPT to optimize operations.

These AI tools are thirsty for energy. ChatGPT alone consumes as much electricity every day as 33,000 households, according to a recent report by real estate firm JLL.

The rise of AI extends beyond just large corporations. Governments and businesses of all sizes are embracing AI for tasks ranging from customer service chatbots to data analysis and operational management. All these applications contribute to the growing need for data center infrastructure.

The surge in AI adoption, coupled with limited data center space, pushed rental prices up by 19% in 2023. Locations with easy access to abundant electricity and fiber interconnections are growing in demand across the country, according to JLL’s report.

Data center construction reached record highs in 2023, reflecting the urgency for additional capacity. Notably, 83% of space under construction is already pre-leased, highlighting the intense demand.

Sign up for our Nearshore Americas newsletter:

Leading data center markets like Northern Virginia and Phoenix (Arizona) witnessed significant growth in 2023. In the first half of 2023, the primary North American data center markets saw 3.4 GW of transactions signed, bringing the full-year total to a record of 4.3 GW.

Secondary markets added 124 MW of absorption in that same period, and 554 MW for the whole of 2023.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

Add comment