How Are Rising AI Workloads Reshaping the Data Center Industry?

Story by James Walker

Key Points:

• Despite record levels of construction, North America’s primary data center markets saw vacancy rates plunge to an all-time low of 1.9% by the end of 2024, according to CBRE. These core markets include Northern Virginia, Atlanta, Chicago, Phoenix, Dallas-Fort Worth, and Hillsboro, Oregon.
• With primary markets experiencing such low vacancies, investors are increasingly eyeing secondary markets like Charlotte, Northern Louisiana, and Indiana, where favorable tax incentives, land availability, and improved power accessibility are spurring new development.
• Looking ahead to 2025, 世邦魏理仕 said it expects deployment of up to $500 billion in capital for Project Stargate – a joint venture between OpenAI , 甲骨文 , and ソフトバンク to build 20 large AI data centers in the U.S. – to focus on greenfield campuses that may take five years or more for completion.
• And amid the power scarcity, transitioning from coal-generated to renewable-energy power generation will continue to gain traction in 2025. On-site solar, wind, geothermal, and nuclear generation are all being evaluated, with natural gas being an interim alternative to coal.

“The rise of AI workloads is transforming the data center industry, driving unprecedented demand for power-intensive infrastructure,” CBRE said. “AI-related occupiers are increasingly influencing site selection, design and operational requirements, prioritizing markets with scalable power capacity and advanced connectivity solutions.”

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You already know that every day at Data Center Knowledge brings advice, trends and strategies for data center professionals on how to design, build, and manage world-class data centers.

That means original reporting from our team of journalists and unique commentary you won’t see anywhere else! But in case you missed them, here are some of our other must-read favorites from this week:

Previewing Advancing Data Center Construction West 2025

Story by Drew Robb

Key Points:

• With investments increasing at a dizzying pace, the pressure to build smarter, faster, and more efficiently has never been greater. Advancing Data Center Construction (ADCC) West 2025 is where industry leaders tackle these challenges – exploring the latest trends, technologies, and partnerships to deliver high-quality, future-ready facilities on time, every time.
• Taking place in Salt Lake City, Utah, from March 17–19, the event brings together experts from leading data center operators, contractors, and design firms to share insights and build connections.
• “The 2025 agenda is packed with strategies to accelerate speed to market, harness new technologies, and address critical challenges in resources such as power and labor, enabling you to build efficient, high-quality data centers, on time and at scale,” said ADCC conference producer Jarred Brockett.
• The week kicks off with a keynote from Tony Grayson , general manager of Compass Datacenters . His talk, ‘Harnessing the Power of Evolving Chip Technology to Prepare Your Projects for Tomorrow’s Demands,’ will cover: How evolving chip technology is reshaping mechanical and electrical infrastructure, Adapting facility layouts to power and cooling demands, and Retrofitting existing facilities to meet next-gen computing needs.

Transforming How Data Centers Manage Storage

Story by Uwe Kemmer

Key Points:

• For organizations looking for enhanced storage requirements, shingled magnetic recording (SMR) can help to deliver up to 20% more storage capacity at minimal additional cost, compared to conventional magnetic recording (CMR) HDDs.
• Hyperscale providers and enterprises alike are grappling with soaring data volumes that demand smarter storage solutions. SMR technology addresses this challenge by increasing the area density of HDDs, as well as overall per-drive capacity through overlapping parts of the previously written magnetic tracks.
• With sustainability no longer just an option but a necessity for organizations, SMR technology naturally aligns with the environmental, social, and governance (ESG) goals firms now have in place, by reducing data center storage footprints.
• As digital transformation accelerates, storage strategies must evolve to balance performance, capacity, and sustainability. SMR technology provides a scalable, cost-effective solution that redefines these parameters.

Understanding the AI Factory Conversation

Story by Andy Patrizio

Key Points:

• Simply put, an AI factory is a specialized data center designed for AI processing rather than traditional workloads like hosting databases, file storage, business applications, or web services. An AI factory is built around GPUs, which outperform CPUs in speed and power when handling AI workloads.
• AI factories are facilities designed to process massive amounts of data for generative AI use, training models and generating outputs like text, images, videos, or audio. They also update AI systems and control other technologies, including robots and supercomputers.
• One example is Elon Musk’s xAI data center, which houses 100,000 英伟达 H100 GPUs for advanced AI processing. At an estimated $40,000 per GPU, that represents an investment of over $4 billion from a single customer – perhaps illustrating why 英伟达 CEO Jensen Huang continues to champion the concept of AI factories.
• “So, is it going to be a small trend where there’s a handful of companies that do a handful of dedicated AI factories, or is it going to be bigger? My personal speculation is it will probably be about a year before we get a better bead on whether new data center construction has essentially a new face to it in the world of AI factories,” said Alan Howard , principal analyst at Omdia specializing in infrastructure and data centers.

Data Center Chip Wars Here to Stay

Story by Wylie Wong

Key Points:

• The chip giant unveiled its Xeon 6700/6500P series processors, which feature performance cores (P-cores) that deliver an average of 1.4 times better performance than Intel’s previous generation processors across a variety of enterprise workloads.
• With today’s announcement, 英特尔 said it has completed its rollout of Xeon 6 processors. These processors offer two product families: P-core chips, which are focused on performance, and efficient cores (E-cores), which balance energy efficiency with performance and are designed for public and private clouds.
• With diversified applications in mind, Intel also launched the Intel Xeon 6 SoC chip for telecommunications companies’ edge environments.
• Meanwhile, Intel’s high-end E-core chip, the 288-core 6900E processor, is now in production and has been deployed by a large cloud customer, said Ronak Singhal , Intel’s senior fellow and chief architect of Xeon products, during a media briefing.
• During the briefing, Singhal touted Intel Xeon 6’s security features, built-in AI accelerators and faster memory performance through Multiplexed Rank DIMM (MRDIMM).

Major Moves Inside the Industry

Story by James Walker

The Data Center Knowledge News Roundup brings you the latest news and developments across the data center industry – from investments and mergers to security threats and industry trends.

Key Points:

• Making good on predictions that 10 GW of new capacity will come online in 2025, the past month has brought a wave of fresh data center investment announcements.
• You’d be hard-pressed to find anyone in tech who hasn’t heard about the $500 billion Stargate announcement. Unveiled on January 21, the initiative – backed by SoftBank, OpenAI, Oracle, and MGX, with Arm, Microsoft, and NVIDIA as key partners – aims to develop AI infrastructure across the U.S. Plans include 10 data centers, with one already under construction in Texas, and the potential to expand to 20, according to Oracle CTO Larry Ellison.
• In other hyperscale news, Meta Platforms said it will invest as much as $65 billion in projects related to?AI?in 2025. The plans include building a giant new data center and increasing hiring in AI teams, CEO Mark Zuckerberg said. Not long after the announcement, the company said its data center in Mesa, Ariz., is now online.
• In Europe, the UK is planning special districts for constructing data centers. The country will explore dedicating?nuclear energy?to the sites as part of a Labour government project to boost technology growth and the ecosystem for AI.
• In Asia-Pacific data center news, India’s largest business conglomerate, Reliance Industries, is building what may turn out to be the world's largest data center by capacity, according to a Bloomberg?report.

Chip Watch: Commentary of the Week

Story by Matt Day

Key Points:

• 微软 announced its first quantum computing chip, a major step in the company’s effort to produce devices that might someday solve problems beyond the reach of modern computers.
• The company says its Majorana 1 chip harnesses eight qubits, the building blocks of quantum computing, on a sticky note-sized piece of hardware it figures could eventually host one million of them.
• Right now, the chip is capable of little more than solving math problems that prove it can be controlled. But Microsoft engineers say it’s far enough along to serve as the foundation for future quantum machines.
• The field of quantum computing, whose imminent arrival has been predicted for about a decade, has seen a flurry of announcements in recent months indicating that the machines may be nearing practical utility.
• The trouble – for 谷歌 , 微软 and a host of startups plugging away at quantum machines – is the technology’s error rate. Producing the particles that can be electronically controlled requires supercooled, quiet environments because stray heat or sound waves can introduce mistakes.

Latest Major Tech Layoff Announcements

Original Story by Jessica C. Davis, Updated by Brandon Taylor

Key Points:

• As COVID drove everyone online, tech companies hired like crazy. Now we are hitting the COVID tech bust as tech giants shed jobs by the thousands.
• Updated February 28, 2025 with layoff announcements from 欧特克 , 谷歌 , eBay , commercetools and Dayforce .
• Check back regularly for updates to InformationWeek's IT job layoffs tracker.

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