Data center power consumption in the US is set to reach 35GW by the end of the decade, almost double its 2022 level.

Demand for AI and machine learning-ready racks will drive this growth, according to a new market report from commercial property consultancy Newmark.

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Tysons Corner in Northern Virginia. The state is the largest data center market in the US, but availability is limited. – Getty Images

The report also highlights low levels of available space in data center hotspots across North America, with low single-digit availability in several key markets.

Data centers switch on to AI

The increasingly sophisticated AI services on offer from the hyperscale public cloud providers mean power requirements in data centers are likely to rocket in the coming years, the report’s authors say.

While the hyperscalers typically need 10-14kW per rack in existing data centers, this is likely to rise to 40-60kW for AI-ready racks equipped with resource-hungry GPUs. This means that overall consumption of data centers across the US is likely to reach 35GW by 2030, up from 17GW in 2022.

“Fundamentally, supporting accelerating AI/ML adoption requires more power and cooling than much of the existing data center inventory can accommodate,” the report said. “Not all existing data centers lend themselves to retrofitting, catalyzing demand for new product in both existing and emerging markets.”

Capacity limited in major US markets

Existing markets are already struggling to meet demand, the report says. In Northern Virginia, the largest data center market in the world at 3,400MW, availability is running at just 0.2 percent.

Upcoming developments in the state include a 72MW campus in Leesburg, which is being built by Stack Infrastructure. Announced earlier this month, it is due to start coming online in the first half of 2025.

Other popular areas face similar challenges, the report says, with availability in the Bay Area around San Francisco running at 0.5 percent of capacity, while availability in Dallas Forth Worth is 1.9 percent and in Phoenix, Arizona, it’s 3.8 percent.

Elsewhere, the Newmark report highlights a sharp decline in the data center sales market. The year to the end of September 2023 saw sales worth $1.2bn recorded in the US, down 46 percent year-on-year.

“The decline in transactions is partially rate-driven but the significant amount of M&A in the past few years has limited the number of remaining scaled assets,” the report says. “There is also an increasing divergence between buyer and seller views on valuation, which is well above build costs.”

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