Source URL: https://www.theregister.com/2025/03/19/datacenter_vacancy_record_low/
Source: The Register
Title: Datacenter vacancies hit record low as power shortages stall projects
Feedly Summary: Supply chain and tariffs issues could spell trouble across multiple markets, warns JLL
Analysis Despite ongoing construction efforts, the North American colocation datacenter market is grappling with record-high occupancy rates. This surge in demand, coupled with delays in new projects due to electricity shortages, has created a challenging environment for both developers and customers.…
AI Summary and Description: Yes
Summary: The North American colocation datacenter market is experiencing unprecedented demand and record-low vacancy rates, exacerbated by electricity shortages and supply chain issues. AI workloads are projected to significantly increase, making up 40% of datacenter workloads by 2030, but the growth is constrained by energy availability and logistical hurdles. This situation presents critical implications for security and compliance across cloud and infrastructure sectors, as datacenters must adapt to evolving technological and regulatory landscapes.
Detailed Description: The analysis outlines the current state and challenges facing the North American colocation datacenter market, highlighting the intersection between technology demands (particularly from AI) and infrastructure limitations. Key points include:
– **Record Low Vacancy Rates**:
– Vacancy in the colocation market has reached an all-time low of 2.6%.
– Most available space is pre-leased, indicating strong demand, especially from tech firms and financial institutions.
– **AI Workloads Growth**:
– AI workloads represented 15% of datacenter activity in 2024, expected to rise to 40% by 2030, highlighting a significant shift towards AI-driven operations.
– **Electricity and Power Constraints**:
– Datacenters require substantial power, with many projects delayed due to the North American power grid nearing full capacity.
– Proposed projects often wait several years for grid connections, impacting the growth of new datacenter facilities.
– **Infrastructure and Supply Chain Issues**:
– The average delivery time for essential datacenter equipment has improved post-pandemic but remains extended compared to pre-2019 levels.
– A global imbalance exists, with the U.S. housing half of the datacenter market but relying heavily on Asian manufacturing for equipment.
– **Regulatory and Compliance Factors**:
– The implementation of tariffs and acts like the Infrastructure Investment and Jobs Act, Inflation Reduction Act, and CHIPS Act could impact the cost and expansion of datacenters.
– **On-Site Power Generation Solutions**:
– Some datacenters are exploring on-site power generation, including potential nuclear solutions, yet commercialization and regulation pose additional challenges.
– **Market Dynamics**:
– Increasing lease rates indicate a strong commitment from companies to remain in outsourced models rather than reverting to self-hosting.
– With landlords phasing out concessions, economic pressures on customers will likely grow.
– **Long-Term Outlook**:
– Although challenges persist, advancements in technology may alleviate some of the issues, particularly relating to power consumption and infrastructure efficiency.
This situation underscores the critical need for compliance, security, and strategic planning in the face of rapidly evolving demands in the datacenter landscape, especially with the expected rise of AI workloads and their implications for energy resources and regulatory environments.