Over the last two years, data center construction in the U.S. has increased more than seven-fold, according to a report by JLL, a global real estate company, . That’s in large part thanks to the AI boom that’s driving up demand for computing power.
And as data centers move closer to urban areas, new builds are starting to look different than the traditional windowless warehouse data centers we might be more familiar with.
Belle Lin, tech reporter at the Wall Street Journal, wrote about the changing architecture and aesthetics of data centers. Lin joined “Marketplace” host Kai Ryssdal to discuss her piece. Below is an edited transcript of their conversation.
Kai Ryssdal: Data centers that are now being built increasingly because of AI and all of that, but they are not like they used to be, right? You can’t just do a plain box anymore.
Belle Lin: That’s right. And not only are they plain boxes, but often compared to these kinds of prison-like sprawling structures over vast tracks of often rural land. What’s happening now, as you rightly mentioned, AI is one of the factors that’s pushing these data centers higher, especially in these urban locales. So cities like New York and Chicago, they’re getting a lot taller and kind of starting to look like the skyscrapers that surround them.
Ryssdal: Is there a technical reason why you’d want your data center to be in the urban center?
Lin: Absolutely. So when we think about internet connected devices, for example, a lot of those are really low latency, meaning that they can’t have this kind of lag that makes the connection speeds really slow. And so for people who live in cities, or local companies that depend on these fast connection speeds, the data centers need to be located very close to them, and that’s often in the city centers.
Ryssdal: City centers are, of course way more expensive than building out in farmland somewhere.
Lin: Yeah, that’s right. So just as it’s a lot more expensive to buy and rent a one-bedroom apartment in the heart of New York City, that’s something I’m experiencing myself, it’s a lot cheaper to have the vast acres of land in a rural area. So, data center developers are thinking about those same economics, where they’re very land constrained in places like New York and Chicago, but they still need the same sort of power density and power requirements, and so they’re building up.
Ryssdal: And building up, of course, gets more expensive, right? Because you have to connect to the piping and all of that extra construction stuff.
Lin: Exactly. Costs, like the cement to build the data centers taller, the cost of copper piping, the cost of equipment, all of these things developers have to take into account, but at the same time, they need to provide the same or more amount of power.
Ryssdal: This is kind of a loosey, goosey question, but are data centers good neighbors? I mean, if you build one in Brooklyn or downtown Manhattan, where you know all the lofts are or whatever, is that a pain in the butt for the people who live nearby?
Lin: Data centers are not great neighbors. That’s especially felt in suburban areas, where in the past two years, these high-rise data centers have really started pushing out to. And so that’s where you see a lot of this kind of “not in my backyard” protests because data centers are loud, they produce a lot of noise. And also, if you live in a desert environment like Phoenix, you don’t want data centers sucking up local resources like water. But in cities, we’re friendlier, I would say. With data centers in cities, they’re not quite the kind of hulking beasts that they are in the suburbs and beyond. They’re really more like slick urban dwellers, because they often have these nice-looking facades. They might have a green exterior, green walls, or maybe even a greenhouse on the roof. So, the look and feel of these data centers is changing too.
Ryssdal: Honestly, we should all just get used to it because it’s not like computing needs are going to go down anytime soon.
Lin: They are expected to increase exponentially, largely driven by AI over the next decade and more. And so data centers are here to stay.
