In 2023, the data center market continued to expand despite concerns about economic conditions, according to reports from Cushman & Wakefield, JLL, McKinsey & Co., and CBRE. The “2023 Global Data Center Market Comparison” report highlighted the growth in North America, with Northern Virginia and Portland, OR leading the way. Secondary markets such as Portland, Phoenix, Columbus, and Canadian markets are also gaining traction as operators look for larger sites with affordable power.
JLL’s “2023 North America Data Center Report” noted that market conditions are expected to remain tight through 2024, with a supply and demand imbalance leading to a shortage of colocation space and rising prices. Secondary markets are projected to support overflow from primary markets facing constraints.
Investors are increasingly interested in the data center market, with McKinsey & Co. forecasting a significant increase in demand for power consumption in the U.S. market by 2030. CBRE’s “North America Data Center Trends H1 2023” report highlighted strong demand and developer interest in construction, driven by AI technologies.
Virginia emerged as a prominent hub for data centers, hosting the largest data center market in the world. Northern Virginia alone is home to over 35% of known hyperscale data centers globally. The state’s abundant and affordable electric power, renewable energy options, business-friendly environment, and skilled tech workforce have attracted major companies like Amazon Web Services (AWS).
AWS announced plans to invest $35 billion in Virginia by 2040 to establish multiple data center campuses, creating at least 1,000 jobs. Virginia’s data center sales and use tax exemptions, infrastructure with fast data transmission capabilities, and top-notch tech workforce have solidified its position as a data center capital.
The state’s focus on renewable energy, with investments from companies like Amazon, Microsoft, and Meta, and plans for significant solar and offshore wind energy generation by Dominion Energy further enhance Virginia’s appeal for data center operators.
With a favorable business climate, room for infrastructure growth, access to renewable energy sources, and a talented workforce, Virginia offers a comprehensive package for data center operators looking to establish a long-term presence in the state.
For more information on Virginia’s data center industry, visit www.vedp.org.
Data centers in the United States, including those in Alabama, Florida, Virginia, Texas, and Tennessee, continue to grow despite fears of a complete halt in the industry. According to Business Facilities, the demand for data center services has been on the rise, driven by the increasing reliance on digital technologies and cloud computing. This growth has led to a surge in investments in data center infrastructure across the country.
Some of the key factors driving the growth of data centers include the need for increased data storage capacity, improved network connectivity, and enhanced security measures. Additionally, the ongoing transition to remote work and online learning due to the COVID-19 pandemic has further boosted the demand for data center services.
Despite the challenges posed by the pandemic, data center operators in states like Alabama, Florida, Virginia, Texas, and Tennessee have continued to invest in expanding their facilities and upgrading their infrastructure to meet the growing demand. As a result, the data center industry in these states remains robust and poised for further growth in the coming years.