AI Is Driving Data Center Development Nationwide

As artificial intelligence continues to grow, the demand for more and bigger data centers is increasing as well. According to Cushman and Wakefield, North America continued its high-growth trajectory last year, reaching 20 GW (gigawatts) of operational capacity. The total added capacity for 2024 was 3.2 GW. 

“AI is definitely a driver of the growth of data center proliferation and size in terms of capacity and power,” says Rob Fuller, past president of the Institute of Real Estate Management Delaware Valley Chapter and senior facilities manager of CBRE. 

“We are such a data-driven society, and data centers where all the mining of data can take place supported by AI allow us to capture and present data seemingly at the speed of light, limited only by our imagination,” he explains, noting that he only sees data center development increasing. 

Currently, Northern Virginia leads the way as the most robust data center market. At the end of last year, the area was operating at 5.9 GWs. However, many developers are looking toward new locations for data centers – especially locations in less busy areas, allowing for bigger data center facilities. 

In August, CBRE reported that the seven largest data center markets in North America, following Northern Virginia, were: Dallas/Fort Worth, Chicago, Phoenix, Silicon Valley, Hillsboro (Oregon), Toronto, Atlanta, New York Tri-State and Montreal. 

While utility power is considered when choosing locations to build data centers, Fuller says another factor is access to an educated workforce, citing data center markets that are developing in the Midwest specifically. 

“Not only do you have supporting universities such as Ohio State, Purdue and Illinois Tech, but there’s available land and a lower cost of living when compared to California and New York. I see those locations increasing their share of the data center market.” 

He also mentions South Florida, specifically Dade County and Miami. While data center operators initially shied away from Florida due to hurricane concerns, Fuller notes that data centers have become more weatherproof, and Florida is an attractive place to live for many. 

When it comes to data center development, Pennsylvania may also offer opportunities. 

“The metro area of Philadelphia has a highly educated workforce, great universities, a diverse economy, excellent transportation systems, available land and ideal placement between New York and Boston to the north and Baltimore and Washington, D.C., to the south. And with nuclear power slowly coming into play (like Three Mile Island re-opening), this will provide more than one power utility option for data centers.”