U.S. Data Center Demand Will Double by 2030

The rapid expansion of U.S. data center capacity to support the demand for artificial intelligence will double the size of the industry by 2030, measured in gigawatts.

The U.S. data center footprint will absorb 35 gigawatts by 2030, more than twice the 17GW total in 2022, according to a new U.S. Data Center Market report from Newmark.

The surge in power consumption will be driven by an industry-wide upgrade to data center campuses that are being rebuilt or newly developed to meet the huge data processing demands of AI and its cousin, machine learning (ML), the report said.

Newmark’s projection of exponential growth in data center capacity was underlined this week by the announcement that two firms are investing $6.4B in equity in Vantage Data Centers.

Vantage, one of the world’s largest data center developers, will invest the infusion of funding from infrastructure investor DigitalBridge Group and technology investor Silver Lake to add three gigawatts of capacity to its footprint in response to the growing AI demand for data processing capacity, according to a report in the Wall Street Journal.

Hyperscale operations designed to support AI need five times the power consumed by existing facilities, with a corresponding increase in large-footprint cooling systems. All of this means expanded data center infrastructure.

Current hyperscalers require about 14 KW per rack in existing data centers, while the higher processing needs of AI will need up to 60 KW per rack. Data centers are replacing central processing units with graphics processing unit clusters required by AI, with each cluster needed up to 15 times more energy, Newmark reported.

Northern Virginia’s data center market, the largest in North America, now spans more than 30M SF with net absorption of 3,400 MW, with another 1,400 MW in the pipeline and scheduled to be delivered in the next three years.

Data canter hubs in Dallas-Fort Worth and Phoenix have growth to 1,128 MW and 1,100 MW, respectively.

“The data center industry is positioned for continued expansion due to hyperscaler demand, ample investment and paradigm shifting technological innovations that will necessitate more and newer data centers to support,” Newmark said.

Amazon, which is in the midst of a $35B expansion of its data processing footprint in Virginia, suffered a setback this month to its $6B project to expand Northern Virginia’s data center hub into King George County, which sits between Washington, DC and Richmond.

Amid growing political opposition to data center sprawl in Virginia, the King George County Board of Supervisors reversed its approval of tax incentives for Amazon’s deal with Utility Birchwood Power Partners to develop a 7.5M SF data center campus on the site of the decommissioned Birchwood power plant.

Plans for the data center were filed in July and called for the construction of data centers in eight buildings encompassing 4M SF, including a pair of electrical substations, with a full build out to 7.5M SF to be completed over 15 years.

The county supervisors approved rezoning for the project, the first major data center project in King George County, in September, the same time they negotiated a performance agreement setting the tax breaks Amazon would receive.

On December 19, the supervisors approved incentives that granted Amazon a $36M tax rebate equal to 10% of its infrastructure costs; the deal also gives Amazon tiered tax breaks tied to the company’s spending on information technology equipment.

At the beginning of this year, there was a political realignment of the King George County Board of Supervisors, which saw an opponent of Amazon’s project become board chair and three new board members with similar views take office, according to a report in The Free Lance-Star.

The newly constituted board wants to renegotiate the deal with Amazon. The new board chair, T.C. Collins, has stated that the tax revenue the county will get from the Amazon deal doesn’t justify granting the use of county land to the tech giant, the newspaper report said.