Is a Data Center Boom Coming?

The demand for computing power, driven largely by the rise of artificial intelligence (AI), is set to ignite a significant increase in data center construction. While the adoption of cloud computing has reduced the need for individual organizations to maintain their own data centers, it has simultaneously spurred the growth of large-scale data centers operated by major providers like Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure. According to AFCOM’s eighth annual State of the Data Center report, we are on the verge of an unprecedented data center construction boom, with new projects expected to increase sixfold in the next three years. This article delves into the factors driving this boom, the implications for sustainability, and what it means for the future of data center operations.

The Driving Force: Artificial Intelligence

Artificial intelligence is not just a technological buzzword; it is a transformative force reshaping industries and demanding vast amounts of computing power and data storage. The implementation of AI technologies requires significant infrastructure to handle the processing of large datasets, the training of complex models, and the deployment of AI-driven applications.

AI applications, such as machine learning and deep learning, rely on extensive computational resources. Training sophisticated AI models can require thousands of GPU hours, leading to substantial energy consumption and the need for robust cooling systems. For instance, training the GPT-3 model by OpenAI reportedly used hundreds of petaflop/s-days of computation, illustrating the immense resource demands of cutting-edge AI research.

As AI continues to permeate various sectors, from healthcare to finance, the need for dedicated data centers capable of supporting these operations has grown exponentially. Bill Kleyman, program chair of Data Center World, emphasizes that we are on the cusp of a new digital era, characterized by unceasing connectivity and an increasing reliance on data center operations. The surge in data center construction is a direct response to these evolving technological needs.

The Scale of the Construction Boom

AFCOM’s report highlights the expected magnitude of the upcoming data center construction boom. By the end of this boom, the total number of data centers in operation is projected to increase by 57%, with the average number of data centers per respondent rising from 14 to 22.

These figures underscore the rapid expansion of data center infrastructure. For example, if each new data center requires an investment of $200 million on average, a sixfold increase in construction projects could translate to trillions of dollars in capital expenditure globally. This massive investment reflects the critical role data centers play in the modern digital economy.

Moreover, the geographical distribution of these new data centers is likely to be global, with significant developments in regions such as North America, Europe, and Asia-Pacific. This expansion will enhance the global digital infrastructure, enabling faster data processing and improved access to AI-powered services.

Sustainability Concerns and Initiatives

While the construction of new data centers is essential for supporting technological advancements, it raises significant sustainability concerns. Data centers are notorious for their high energy consumption, which contributes to their carbon footprint. However, the industry is increasingly focusing on sustainable practices to mitigate these environmental impacts.

AFCOM’s report reveals that nearly three-quarters of respondents plan to use renewable energy sources to power their data centers. Solar energy is gaining the most traction, with 59% of respondents indicating its use, followed by wind energy at 28%. This shift towards renewable energy is crucial for reducing the carbon footprint of data centers and promoting environmental sustainability.

For instance, Google has committed to operating its data centers on carbon-free energy by 2030. This ambitious goal involves not only increasing the use of renewable energy but also enhancing energy efficiency through innovative cooling technologies and AI-driven optimization.

In addition to renewable energy, data centers are adopting various energy efficiency measures to minimize their environmental impact. Advanced cooling technologies, such as liquid cooling and free air cooling, reduce the energy required to maintain optimal operating temperatures. Furthermore, AI and machine learning are being used to optimize energy usage, predict maintenance needs, and enhance overall operational efficiency.

For example, DeepMind, a subsidiary of Alphabet, has applied AI to improve the energy efficiency of Google’s data centers, resulting in a 40% reduction in cooling energy and a 15% improvement in overall power usage effectiveness (PUE).

Economic and Social Implications

The data center construction boom has far-reaching economic and social implications. The investment in data centers drives economic growth, creates jobs, and enhances the technological capabilities of regions around the world.

The construction and operation of new data centers generate significant employment opportunities. These jobs span various sectors, including construction, engineering, IT, and facilities management. Additionally, the presence of data centers can attract other tech companies and spur local economic development.

For example, the construction of Facebook’s data center in Altoona, Iowa, created thousands of construction jobs and hundreds of permanent positions. The economic impact extended beyond job creation, with local businesses benefiting from increased demand for goods and services.

The expansion of data center infrastructure enhances the technological capabilities of regions, enabling them to support advanced applications such as AI, cloud computing, and edge computing. This, in turn, drives innovation and competitiveness, fostering a more dynamic and resilient digital economy.

Challenges and Future Directions

While the data center construction boom presents numerous opportunities, it also poses challenges that need to be addressed to ensure sustainable growth and operational efficiency.

One of the primary challenges is managing the environmental impact of data centers. As the industry continues to grow, it must prioritize sustainability through the adoption of renewable energy, energy-efficient technologies, and environmentally responsible practices. Collaboration with governments, NGOs, and industry stakeholders will be essential to develop and implement effective sustainability strategies.

Data centers are critical infrastructure, and their security and resilience are paramount. As cyber threats become more sophisticated, data centers must implement robust cybersecurity measures to protect sensitive data and ensure the continuity of operations. Additionally, disaster recovery and business continuity plans must be in place to address potential disruptions caused by natural disasters, technical failures, or cyberattacks.


The data center construction boom driven by the demand for AI and other advanced technologies marks a pivotal moment in the evolution of the digital landscape. As we move towards a new digital era, the expansion of data center infrastructure will play a crucial role in supporting the growing computing power and data storage needs of various industries.

By prioritizing sustainability, enhancing energy efficiency, and ensuring security and resilience, the data center industry can navigate the challenges of this rapid expansion while contributing to a more sustainable and secure digital future. As Bill Kleyman aptly stated, we are crafting a digital era like no other, and the data centers of today will be the backbone of the technological advancements of tomorrow.

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