2. Location, location, location
Retrofitting conventional data centres for AI is often cost-prohibitive as they typically lack scale, access to sufficient power to handle increasing rack energy density and cannot accommodate advanced cooling technologies. With tech firms adopting a trend for building large campuses, tech firms and developers of new generation data centres are looking beyond mature geographic markets.
Northern Virginia, which currently accounts for over 20% of US data centre capacity, will continue to dominate as demand for AI grows. However, focus for future development is turning to more remote areas such as the Midwest, which do not have the same land costs, NIMBY (‘Not in my backyard’) pressures and regulatory constraints as more established data centre markets.
Data centre developers are prioritising land with access to untapped power sources, water, workforces, and favourable regulation. The possibility of hooking data centres up directly to existing nuclear power stations ‘behind the meter’ are being explored, but has raised concerns for other consumers’ power costs, reliability and emissions.