North America's data center supply under construction has surged by 70% compared to last year, reaching a record 3.9 gigawatts, according to a new report by CBRE Group (CBRE) This unprecedented growth reflects the escalating demand for data center capacity driven by the rapid expansion of artificial intelligence (AI) and cloud computing services among the world’s largest technology companies.
In the first half of 2024 alone, over 500 megawatts of new data centers—equivalent to the total existing capacity in Silicon Valley—were brought online across North America's top eight data center markets.
Market Overview:
- Data center supply under construction in North America jumped 70% year-over-year.
- New data center inventory grew by 10% in the first half of 2024.
- Data center vacancy rates dropped to a record low of 2.8%, driving up prices.
Key Points:
- Demand for AI and cloud computing is fueling the surge in data center construction.
- Newer data centers are commanding premiums due to their advanced infrastructure.
- Smaller markets like Northern Indiana and Idaho are becoming more attractive for future data center development.
Looking Ahead:
- The expansion of the data center market is creating new opportunities in both established and smaller markets.
- Investors and tech companies are closely watching trends that will shape digital infrastructure in North America.
- The continued growth of AI and cloud services will drive further demand for advanced data center facilities.
The report highlights a significant 10% increase in new data center inventory in just the first six months of the year, with a year-over-year growth of 23%. As demand intensifies, data center vacancy rates have plummeted to a historic low of 2.8%, further driving up prices.
As the data center market continues to expand at a breakneck pace, the implications for the technology sector are profound. The surge in construction and the dwindling vacancy rates signal a robust growth trajectory for the industry, with new opportunities emerging in both established and smaller markets.
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