Between now and 2030, North America could see $1 trillion in data center development, according to a report out this week from real estate services firm JLL. That’s the equivalent of more than 100 gigawatts of capacity, between colocation and hyperscale data centers.
This is despite “market turbulence” in the first half of the year, from uncertainty about the implications of Trump-imposed tariffs to the implications of Chinese company DeepSeek’s surprise release of its highly efficient artificial intelligence model. “Despite this, the sector maintained momentum, and delivered a fresh set of records,” JLL wrote.
By mid-year, data center vacancy rates have declined to a record low of 2.3%; that lack of supply is “constraining economic growth and undermining national security,” JLL found. And high preleasing rates — 73% of the 8 gigawatt pipeline — suggests that vacancy rates will stay high for the coming years.
But that development isn’t evenly dispersed across the United States. In fact, three-quarters of activity is taking place in markets with low-cost electricity — which makes sense, given that rates have increased by almost 30% in the last five years after remaining stable from 2010 to 2020.
In absolute terms, Northern Virginia — known as “Data Center Alley” thanks to its proximity to the computing needs of the federal government — leads the pack, growing by nearly four GW since 2020. Dallas (1,008 megawatts) and Atlanta (828 megawatts) follow close behind.
But in terms of percentage, Columbus and the Austin/San Antonio markets have grown fastest, starting from a small base five years ago. Since then, most markets “have doubled or tripled in size,” JLL found. The data center sector in North America has expanded at a compound annual growth rate of 20% since 2017.
This parallels a broad realignment of the way data centers get built: from a fiber-first approach, to an energy-first one. For decades, data centers clustered in places like Northern Virginia, with robust network connectivity. But now, companies from small developers to hyperscalers have begun chasing sites where power — and especially, in certain cases, clean power — is readily available, and bringing fiber with them.
One example of this shift is Google’s strategic partnership, announced last December, with Intersect Power and TPG Rise Climate; Google will provide offtake as an anchor tenant, while Intersect builds new clean energy projects.
This comes as the typical data center wait for a grid connection is stretching to longer than ever: an average of four years. This process, as Latitude Media has reported, is complicated by phantom data centers flooding the load queues. Developers are often in talks with multiple power providers at the same time, comparison shopping for the quickest connection — and creating delays and confusion at the same time.
As a result, JLL noted that utilities have been making it harder to make power requests, requiring larger deposits and minimum contract payments. And the report also said that even though these delays are a hurdle in easing data center supply constraints, there is a silver lining: “This obstacle is also preventing a bubble from forming in the sector.”
Meanwhile, JLL has seen that behind-the-meter solutions to power data centers — especially those that use natural gas turbines — are seeing more interest. And going forward, small modular reactors are a “significant opportunity,” one that Google and Amazon have already begun to invest in.
