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March 11, 2025What is Unified Namespace?
March 11, 2025
Data Centers Are Booming as Build Times & Power Needs Grow
Data centers are going through a boom time.
But standing in the way are long wait times for servers, cooling systems and the electrical grid infrastructure upgrades required to provide data centers with gigawatt-level service.
In some parts of the U.S., it can take years to get grid upgrades, a reality that pushes some data center operators to retrofit dormant industrial buildings already connected to high-capacity power lines.
Data Center Hotspots
Ohio, Virginia and more recently Pennsylvania have become attractive destinations for new and retrofit data centers thanks to their relatively inexpensive real estate, plentiful water supplies, availability of natural gas and reasonable electricity rates, according to market research firm TD Cowan.
But there’s a supply-demand imbalance in the data center market.
Three-quarters of the data centers under construction are already committed to users, meaning there’s not much of a capacity buffer.
“The market will be adding data centers equivalent to the amount of power New York City consumes annually, every year for the next five years,” Michael Elias, a TD Cowan analyst told the Pittsburgh Technology Council during an innovation summit in March 2025.
Elias said about half of those data centers are expected to be built in the U.S.
“The only question is where,” he said.
There are three types of data centers: Hyperscale, Colocation/Interconnection and Enterprise.
Data Center Heavyweights
Major data center capacity buyers are Microsoft, Amazon, Oracle, Google and Meta.
Each one has ramped up their capacity demands because of the AI boom, spurred on by Nvidia, Open AI, Coreweave, Lambda, Vultr, Cirrascale and other companies providing AI-focused cloud services and GPUs.
There are three types of data centers: Hyperscale, Colocation/Interconnection and Enterprise.
Hyperscale Data Centers
This is the type that’s linked to the AI boom.
These data centers are designed to serve the high compute power demands of AI-powered large language models (LLMs) produced by Open AI and others. They’re designed to be scalable, efficient and to support large-scale applications running on AWS, Google, Microsoft, Meta and others.
Colocation/Interconnection Data Centers
These are owned by third parties like Equinix, Digital Realty and CoreSite who rent space and compute capacity to support IT infrastructure that belongs to multiple businesses. From a profitability standpoint, this type of data center can be more challenging to start because it’s up to the owner to create a network of users to buy into center.
Enterprise Data Centers
These centers serve a single company’s internal IT needs.
They can be on the company’s property (also known as on prem) or in off-site locations. Typically, these centers house sensitive workloads and compliance data.
Interestingly, TD Cowan notes that power supply constraints in Northern Virginia, Texas, Ohio and other areas make Western PA an attractive area for new data center construction. Energy costs in Pennsylvania are lower compared to other states and the wait time to upgrade power infrastructure is significant shorter.
The Commissioning Challenge
One other factor extending the build and launch times for data centers is the commissioning process — essentially the final steps in building a data center. Engineers must make sure that the automation and control functions of a data center are properly installed and working. In-house teams at data center developers may require weeks to complete the work.
That’s just one area where GrayMatter can help, providing commissioning services that allow data centers to verify their systems meet the rigorous uptime and reliability standards of the industry.
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