The amount of data centre supply under construction in North America's top markets jumped by about 70 per cent compared to a year ago to a record 3.9 gigawatts, according to CBRE Group research released this week.
Data centres are essentially giant computer warehouses, measured more broadly by the amount of power that they use.
As the world's largest technology companies race to expand their artificial intelligence and cloud computing businesses, power demand from data centres has ballooned.
In the first half of 2024, more than 500 megawatts of new data centres, or roughly equivalent to all of the existing capacity in Silicon Valley, were rolled out in the eight biggest markets in the United States and Canada, according to CBRE.
New data centre inventory grew by 10 per cent in the first six months of the year, while jumping 23 per cent from a year earlier, the report said.
The eight main North American data centre markets are Northern Virginia, Dallas and Fort Worth, Texas; Silicon Valley in central California; Chicago; Phoenix, Arizona; the New York Tri-State Area; Atlanta; and Hillsboro in Oregon.
At the same time new inventory surged, data centre vacancy rates plunged to a record low of 2.8 per cent, CBRE said.
Prices for the centres grew, with newer centres typically coming with a premium compared to older ones.
"The demand for high-powered computing has exacerbated the pricing disparity between legacy facilities and new data centres, partially because older data centres don’t have the infrastructure to handle the power demands of today’s users," CBRE's Data centre Trend Report said.
The demand for newer facilities is likely to make smaller markets, including Northern Indiana, Idaho, Arkansas, and Kansas, more desirable, the report said.
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