Understanding Data Center Demand Growth

Happy to finally share BloombergNEF US Data Center Outlook. This report combines our AI data center primer and US forecast into one incredible deep dive. We left no server rack unchecked – from AI training model demands to project construction timelines – this outlook covers it all. Key Findings: ⚡ BNEF projects US data-center power demand will more than double by 2035, rising from 34.7GW today to 78.2GW. Meanwhile, energy consumption could nearly triple, with average hourly electricity demand jumping from 16.2GWh to 49.1GWh. PJM is expected to remain the biggest by 2035 –followed by Ercot and then the Southeast. ⚡ BNEF’s relatively conservative forecast isn’t downplaying AI – it simply factors in real-world constraints like interconnection delays and build timelines. In the US, a data center takes seven years to reach full operation. For interconnections alone, developers face waits of 2–3 years in Chicago or 7–11 years in parts of Virginia and Texas. ⚡ Four companies – Amazon Web Services (AWS), Google, Meta and Microsoft – currently control 43% of US data-center capacity in 2024, wielding substantial influence over energy infrastructure planning and investment. ⚡ Data-center location decisions hinge many things like power cost, clean power, workforce availability, and tax incentives. But in the age of AI, speed-to-market and scalability top the list. Some developers co-locate near power plants or stranded renewables; others use remote campuses with bridging technologies to accommodate massive AI workloads. Read more here: https://lnkd.in/gAcgP9it Special thanks to Nathalie Limandibhratha (our lead author), along with Tom Rowlands-Rees, Jennifer W., Ben Vickers, and Ashish Sethia, for the many hours and dedication that made this note possible. And to our global counterparts – Jinghong Lyu, Ian Berryman, and David Hostert – it has been a pleasure to hack this data center topic together. What's in the report? ▪️ Section 1: Key findings on growth, AI’s role and hyperscaler influence. ▪️ Section 2: Basics of data-center types, components and efficiency metrics. ▪️ Section 3: How AI training drives massive power needs, cost and design shifts. ▪️ Section 4: Factors influencing where data centers are built. ▪️ Section 5: Regional analysis of major and emerging US data-center markets. ▪️ Section 6: BNEF’s demand and capacity outlook through 2035. Looking to dive deeper into the data?
 The downloadable Excel (included with this report) features: ▪️ All charts & underlying data from the study ▪️ US-wide, project-level data covering every operating data center (April 2025) ▪️ County-level data on pipeline capacity for data centers (April 2025)

Data center inventory in North America grew by a record 43% over the past 12 months, but the region’s vacancy rate remains near historic lows at just 4.2%, according to new data from the CBRE Global Data Center Trends report for 1Q 2025. In other words, developers are deploying more new data center space than ever, but are still unable to keep up with demand, according to CBRE Data Center Solutions. “Rising demand from AI and hyperscale users is shrinking vacancy and operators with available capacity in key markets are commanding premium rates,” said Pat Lynch, executive managing director for CBRE’s Data Center Solutions. Despite ongoing power supply challenges, Northern Virginia remained the largest market, expanding its inventory by 523 megwawatts (MW) over the past 12 months, with a vacancy rate of just 0.76%. The average rental rate increased by 15%, driven by preleasing of facilities scheduled for delivery as far out as 2028. The Top 5 U.S. markets continued to evolve, as Atlanta and Phoenix are now the second and third largest data center markets in North America, surpassing Dallas and Silicon Valley, now fourth and fifth. “Power constraints in legacy markets are forcing hyperscalers to seek new frontiers for development, spreading workloads across multiple smaller locations with faster power availability timelines,” said Gordon Dolven, Director of CBRE Americas Data Center Research. “While improvements in fiber connectivity have reduced latency concerns and supported this shift, it’s power that ultimately determines where infrastructure can scale.” Here's a chart that illustrates the supply issues: Of the 7 markets with the lowest vacancy rates, all but Singapore are in the Americas. Read the report here: https://lnkd.in/eW3aVhQP

Your electricity bill just became the canary in the coal mine for America's biggest infrastructure worry The numbers from this month's energy report aren't just statistics—they're market signals calling for attention. Electricity prices surged 4.5% in May alone. That's nearly double the overall inflation rate. Behind this spike? Data centers have tripled their consumption to 176 terawatt hours in the past decade. Industry projections suggest they could double or triple again within three years. Think about that timeline. We're not talking about gradual shifts over decades. This is explosive demand growth hitting aging infrastructure that was designed for a completely different world. Here's what caught my attention: private companies are now moving into private power generation because the grid simply can't keep up. When Fortune 500s start building their own power plants, that's not innovation—that's admission of system failure. Strategic Reality Check For senior energy leaders: This demand surge represents the biggest grid modernization opportunity since rural electrification. The question isn't whether we'll invest in infrastructure—it's whether clean energy gets the lion's share of that investment or we default back to fossil fuel buildout. For project developers and engineers: Data centers represent concentrated load that's perfect for on-site renewable development. These facilities need 24/7 power, have capital to invest, and increasingly have net-zero commitments. That's your ideal customer profile. For emerging professionals: Understanding the intersection of digital infrastructure and energy systems is becoming table stakes. The companies solving this puzzle will define the next decade of energy markets. What Nobody's Talking About The IEA projects that by 2030, the U.S. will use more electricity processing data than manufacturing aluminum, steel, cement, and chemicals combined. Yet most of our grid planning still assumes demand growth patterns from the 1990s. Smart money is already moving. Utilities that figure out how to partner with hyperscalers on integrated renewable + storage solutions will dominate the next investment cycle. Those that fight distributed generation will lose customers to private power altogether. The grid wasn't designed for this moment. But the infrastructure we build to handle it will define American competitiveness for the next fifty years. Are we treating this AI demand surge as a problem to manage or as the biggest infrastructure investment opportunity of our careers? Because right now, it feels like most of the energy sector is still figuring out that the game has changed. #GridModernization #CleanEnergy #DataCenters #EnergyTransition #Infrastructure

So far this year, the U.S. data center landscape is shifting fast. As power constraints tighten in traditional hubs like Northern Virginia and Silicon Valley, secondary and emerging markets are stepping into the spotlight. Do you agree? Here’s what’s driving the shift and where the real opportunities may lie: 👉🏽 Key Trends: • Explosive Growth: U.S. data center inventory jumped 43% year-over-year in Q1 2025. Atlanta and Phoenix are now among the top four markets. • Hyperscaler Expansion: AI and cloud giants are pre-leasing space in non-traditional markets like Columbus, Des Moines, and Reno to secure power and speed to market. • Design Evolution: Liquid cooling and high-density racks are becoming the norm to support AI workloads. But what are the challenges? • Power Scarcity: Grid capacity is maxed in many metros. Transmission delays are pushing timelines into 2027 and beyond. • Construction Bottlenecks: Labor shortages, permitting delays, and rising material costs are slowing builds. • Cooling and Density Challenges: AI workloads demand new cooling strategies and facility designs, especially in retrofitted sites. So, where’s the opportunity? • Emerging Markets: States like Iowa, Indiana, and Ohio offer cheaper, more available power and faster permitting. This is ideal for hyperscaler and co-lo builds. • Behind-the-Meter Solutions: On-site renewables, gas peakers, and early-stage nuclear (SMRs) are gaining traction to bypass grid delays. • Sustainable Infrastructure: Clean energy integration is now a competitive edge. Why does this matter? AI infrastructure here in the U.S. is being built in places we’re only beginning to notice. Maybe even in a county near you! It’s a dynamic space, and I’m keeping a close eye on the trends and opportunities. What are you seeing in your region or sector? Let me know! 👇🏽

Data centers are the new oil rigs. 70% of future data center demand will be driven by AI. Let that sink in. By 2030, McKinsey projects we’ll need $6.7 trillion globally to keep up with compute power demand. We're talking construction, engineering, cooling systems, power grid upgrades, and cybersecurity. Of that total: → $5.2 trillion will be spent on AI-related workloads → 156 GW of AI capacity will be needed → 125 GW will be added in just five years (2025–2030) This isn’t just an infrastructure challenge. It’s a talent one. Because while hardware scales fast, humans don’t. If 70% of that demand is AI-related, every org racing to stay competitive will need: ML engineers Data center architects Cloud and infrastructure talent Hardware and chip design specialists Energy efficiency and sustainability pros The orgs winning the AI race won’t just have more GPUs. They’ll have better pipelines. Smarter systems. And the right people to scale and sustain them. If your tech roadmap doesn’t include: AI/ML infra architects Energy-efficient compute strategies Cross-functional teams that understand both power and code You’re already behind. And if you do have these roles on your roadmap… Make sure your recruiting strategy can keep up with it. McKinsey report in the comments—well worth the read. 👇

𝐀𝐈’𝐬 𝐄𝐧𝐞𝐫𝐠𝐲 𝐀𝐩𝐩𝐞𝐭𝐢𝐭𝐞 𝐈𝐬 𝐑𝐞𝐝𝐫𝐚𝐰𝐢𝐧𝐠 𝐭𝐡𝐞 𝐔.𝐒. 𝐏𝐨𝐰𝐞𝐫 𝐋𝐚𝐧𝐝𝐬𝐜𝐚𝐩𝐞 U.S. data center power demand is projected to grow from 25 GW in 2024 to over 80 GW by 2030. By then, data centers could account for 12% of the country’s total electricity demand, up from just 4% in 2023. The accelerated adoption of AI, cloud computing, and high-density digital infrastructure is driving this transformation. McKinsey & Company estimates over $500 billion in investment may be required to support 50+ GW of new capacity. Key implications for utilities and infrastructure investors: 𝙏𝙧𝙖𝙣𝙨𝙢𝙞𝙨𝙨𝙞𝙤𝙣 𝙖𝙣𝙙 𝙙𝙞𝙨𝙩𝙧𝙞𝙗𝙪𝙩𝙞𝙤𝙣 𝙖𝙧𝙚 𝙚𝙢𝙚𝙧𝙜𝙞𝙣𝙜 𝙖𝙨 𝙥𝙧𝙞𝙢𝙖𝙧𝙮 𝙘𝙤𝙣𝙨𝙩𝙧𝙖𝙞𝙣𝙩𝙨, not generation Project timelines are being limited by grid 𝙞𝙣𝙩𝙚𝙧𝙘𝙤𝙣𝙣𝙚𝙘𝙩𝙞𝙤𝙣 𝙙𝙚𝙡𝙖𝙮𝙨, 𝙡𝙖𝙗𝙤𝙧 𝙨𝙝𝙤𝙧𝙩𝙖𝙜𝙚𝙨, 𝙖𝙣𝙙 𝙚𝙦𝙪𝙞𝙥𝙢𝙚𝙣𝙩 𝙡𝙚𝙖𝙙 𝙩𝙞𝙢𝙚𝙨 Flexible, 𝙗𝙚𝙝𝙞𝙣𝙙-𝙩𝙝𝙚-𝙢𝙚𝙩𝙚𝙧 𝙜𝙚𝙣𝙚𝙧𝙖𝙩𝙞𝙤𝙣 𝙖𝙣𝙙 𝙨𝙩𝙤𝙧𝙖𝙜𝙚 𝙖𝙨𝙨𝙚𝙩𝙨 𝙬𝙞𝙡𝙡 𝙥𝙡𝙖𝙮 𝙖 𝙜𝙧𝙤𝙬𝙞𝙣𝙜 𝙧𝙤𝙡𝙚 Secondary markets such as 𝙄𝙤𝙬𝙖, 𝙄𝙣𝙙𝙞𝙖𝙣𝙖, 𝙖𝙣𝙙 𝙉𝙤𝙧𝙩𝙝 𝘾𝙖𝙧𝙤𝙡𝙞𝙣𝙖 𝙖𝙧𝙚 𝙗𝙚𝙘𝙤𝙢𝙞𝙣𝙜 𝙝𝙞𝙜𝙝-𝙜𝙧𝙤𝙬𝙩𝙝 𝙯𝙤𝙣𝙚𝙨 for hyperscale and modular data centers Near-term grid resilience will depend on a diversified mix of generation, including natural gas, while long-term planning must align with decarbonization mandates and load flexibility. This is not a future challenge; it is already underway. #UtilityLeadership #GridModernization #EnergyInfrastructure #AIandEnergy #DataCenterDemand #PrivateCapital #InfrastructureInvesting #ElectricityMarkets #TransmissionExpansion #GridStrategy https://lnkd.in/g6pvCGnS

🚨 Global Data Center Growth Is Surging—But Power Bottlenecks Are Holding It Back ⚡ The 2025 edition of the DC Byte Global Data Centre Index is here, and the results are as bold as they are clear: demand has never been higher, but the infrastructure to meet it is falling behind. 🔑 Key Takeaways: 📈 Global Take-Up Hits 12,975 MW in 2024 — a 30% YoY increase, driven by hyperscale, cloud, and AI. 💾 Public Cloud = 52% of all demand, while AI is quickly scaling, now at 11% and doubling annually . 🧱 But construction is slowing down — Power grid constraints, permitting delays, and longer development timelines have flattened U.S. buildout since mid-2024. 📦 Pre-leases are exploding: - Capacity sold before construction is up 33x since 2019 - Under-construction pre-leases are up 2.8x - Live supply pre-leases are up 2.3x 💸 Colo rents are rising fast in the U.S. and EMEA, but APAC remains more balanced thanks to strong live supply additions. 🌍 The Americas are Leading the Charge: - Account for 87% of total tracked capacity - 91% of new live supply in 2024 came from the U.S. - Gigawatt-scale campuses (like Alberta’s 7.5GW Wonder Valley) are now mainstream ⚠️ Supply Gap Looms Large: 📉 Committed capacity is surging, but under-construction volume is plateauing ⏳ Power access is the bottleneck, especially in formerly “safe” primary markets 🧪 Alternative power (gas, hydrogen, microgrids) is being tested—but is no silver bullet 🔮 Where Do We Go From Here? The index projects: - Americas to hit 53.8 GW of live capacity by 2029 - APAC to grow to 32.8 GW - EMEA to reach 20.2 GW despite regulatory and land constraints 📄 Full report: https://lnkd.in/eavc-fUt #AI #DataCenters #CloudComputing #Infrastructure #GridModernization #Hyperscale #PowerCrisis #DCByte #DigitalEconomy

Wall Street panicked over DeepSeek's AI breakthrough. The data center giants just proved them wrong. Here’s the story. The world's largest data center operators just proved Wall Street dead wrong about DeepSeek's AI breakthrough. They’re seeing an "avalanche" of demand on its way. In the last quarter alone, the two biggest players revealed: • Equinix: 50% of the largest deals were AI-focused • Digital Realty: 38% of new power going to AI • Combined: 62 major data center projects under development • Total: 644 megawatts under construction Why now? Three market signals I'm watching: • AI computing is splitting into two categories: training and inference • Inference needs to be near population centers • Tech firms show no sign of slowing down their spending on data centers This shift goes far beyond just housing computers. We're looking at a fundamental reimagining of urban infrastructure. Tomorrow's data centers won't be in remote locations - they'll be woven into our cities. For operators, it's a rare infrastructure play: • Clear market validation from industry leaders • Multiple technical approaches emerging • Strong path to commercialization For investors, it's an opportunity to get early exposure to a new real estate asset class while traditional valuations still apply. The next 12 months will be decisive. Major operators are racing to secure metro locations, and early movers are emerging. Building something in the data center space? Or looking to deploy capital into this emerging asset class? Let's talk.

Investment in data centers is unlikely to slow in 2025; companies poured $180bn into infrastructure last year, contributing to a total industry spend of $465bn. AI, cloud computing, and digital transformation are driving demand, with significant energy impacts. Despite this, North America especially is facing capacity constraints. Data centers can take up to three years to build, due to power, supply chain, and regulatory delays. With only 2.8% of North American data center space unoccupied, demand continues to outpace supply forcing companies to pre-lease facilities years in advance. ⚡ At the same time, AI’s energy consumption is becoming a critical concern. AI currently uses about 10% of data center capacity; a figure expected to triple by 2026. With data centers already consuming 55 gigawatts of power - more than the total generating capacity of some countries - scaling infrastructure sustainably is essential over the long term. The path forward requires integrating more renewable energy, advancing cooling technologies, and strengthening grid infrastructure to support expansion. Our EY team will be sharing more reporting on this topic over the coming quarters, so look out for those insights. 💡 #EnergyTransition #DataCenters #Sustainability #AI #Cloud #Infrastructure

𝗖𝗲𝗻𝘁𝗲𝗿𝗣𝗼𝗶𝗻𝘁 𝗘𝗻𝗲𝗿𝗴𝘆'𝘀 𝟳𝟬𝟬% 𝗦𝘂𝗿𝗴𝗲 𝗶𝗻 𝗗𝗮𝘁𝗮 𝗖𝗲𝗻𝘁𝗲𝗿 𝗜𝗻𝘁𝗲𝗿𝗰𝗼𝗻𝗻𝗲𝗰𝘁𝗶𝗼𝗻 𝗥𝗲𝗾𝘂𝗲𝘀𝘁𝘀 𝗶𝗻 𝗧𝗲𝘅𝗮𝘀: 𝗔 𝗦𝗶𝗴𝗻𝗮𝗹 𝗼𝗳 𝘁𝗵𝗲 𝗙𝘂𝘁𝘂𝗿𝗲? CenterPoint Energy recently reported a 700% increase in data center interconnection requests within the Houston area, a sharp rise from 1GW to 8GW over just a few months. This significant demand has led the utility to forecast an additional 30% increase in peak demand by 2030, from today’s high of 22GW. To meet these demands, CenterPoint is taking swift action with a $3.7 billion investment this year and another $4.9 billion planned for 2025, aiming to bolster Houston’s grid with an estimated 120 new projects. 𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗠𝗮𝘁𝘁𝗲𝗿𝘀 🔸 𝗗𝗲𝗺𝗮𝗻𝗱 𝗚𝗿𝗼𝘄𝘁𝗵: Data centers are critical for AI and cloud expansion, pushing power demand to new levels across Texas and the U.S. 🔸 𝗚𝗿𝗶𝗱 𝗦𝘁𝗿𝗮𝗶𝗻: Rising demand presents a double-edged sword, underscoring the need for capacity while challenging utility infrastructures already operating near peak. 🔸 𝗦𝗲𝗹𝗳-𝗚𝗲𝗻𝗲𝗿𝗮𝘁𝗶𝗼𝗻: The Texas Public Utility Commission now expects data centers to provide some of their own power if they want rapid grid interconnection—accelerating the shift to self-generation. As data center growth explodes, will self-generation become the only viable path forward to sustain demand? What are your thoughts on self-generation for data centers? Is this the future of reliable, scalable power? 👉 Complete DatacenterDynamics Article: https://lnkd.in/eRTi2qix * * * * * * * * * * 𝗧𝗵𝗲 𝘄𝗼𝗿𝗹𝗱 𝗶𝘀 𝗰𝗵𝗮𝗻𝗴𝗶𝗻𝗴 𝗮𝗻𝗱 𝘁𝗵𝗲𝗿𝗲 𝗶𝘀 𝗮 𝗯𝗲𝘁𝘁𝗲𝗿 𝘄𝗮𝘆. 𝗧𝗵𝗲 𝗰𝗼𝘀𝘁 𝗼𝗳 𝗱𝗶𝘀𝗰𝗼𝘃𝗲𝗿𝘆 𝗶𝘀 𝘆𝗼𝘂𝗿 𝘁𝗶𝗺𝗲, 𝘁𝗵𝗲 𝗰𝗼𝘀𝘁 𝗼𝗳 𝗶𝗻𝗮𝗰𝘁𝗶𝗼𝗻 𝗺𝗮𝘆 𝗯𝗲 𝘆𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀. For energy insights, follow: #EnergyNinjaChronicles⚡ Subscribe to the newsletter: 📩 https://lnkd.in/dGpq2-dC #NaturalGas #Power #Procurement #EnergyManagement #UtilityInfrastructure