The number of bit barns currently under construction has exploded in the wake of the AI boom, surging nearly 70 percent in North America's top markets over the past year to a record high of 3.87 gigawatts, according to a newly published CBRE report.

The fastest-growing regions include Atlanta, where the number of datacenter developments increased 76 percent year-over-year to roughly 1.3 gigawatts of capacity. Meanwhile, in Austin and San Antonio, Texas, the report clocked 463 megawatts of new capacity under development, more than quadruple that of the previous year.

This rapid expansion of compute resources, however, is being hampered by a shortage of power and extended lead times for critical electrical infrastructure necessary to bring these facilities online, resulting in delays.

When these facilities do come online, only about 20 percent of it will actually be up for grabs for you and I. Nearly 80 percent of the 3.87 gigawatts of new capacity has already been spoken for by the major hyperscalers, cloud providers, and rent-a-GPU operations.

Despite this, CBRE reports that DC capacity in major markets was up 10 percent in the first half of 2024, with 1.1 gigawatts having come online in the past year.

Unfortunately, for now, supply remains largely constrained with vacancy rates currently at just 2.8 percent. But if you're willing to set up shop in one of the less popular locales like Central Washington, Minneapolis, Houston, or Denver, the report found that the overall vacancy rate was hovering at just shy of 10 percent in North America's secondary markets.

As you might expect, the lack of supply and high demand is driving prices up, though not as quickly as last year, the report found. "The average monthly asking rate for a 250-500 kilowatt requirement across primary markets increased by 7 percent in H1 2024 to $174 per kilowatt per month," the report reads.

Rental rates are expected to continue to rise in the second half driven by higher construction and equipment costs. Much of this is being driven by more demanding accelerators used in high-performance computing applications including AI training and inference. As we previously reported, Nvidia's top-specced Blackwell GPUs will top out at 1,200W and are designed with liquid cooling in mind.

As a result of this trend, CBRE notes that new datacenters are becoming more expensive to build. However, this also suggests that older facilities, which are ill-equipped to power and cool high-end accelerators, could become more accessible.

Going forward, CBRE predicts secondary markets in Northern Indiana, Idaho, Arkansas, and Kansas will become hotspots for hyperscale expansion thanks to their abundance of cheap land and power.

Speaking of power, a shortage of transformers, switches, and generators is expected to continue to plague development timelines potentially by as much as four years. If that weren't enough, CBRE notes that if you need that capacity, customers should expect to prelease space between two and four years ahead of time. ®

https://www.theregister.com//2024/08/21/dc_na_boom/