The rapid advancement of artificial intelligence (AI) is not only transforming industries but also significantly impacting commercial real estate (CRE) and energy infrastructure. As AI applications expand rapidly, the demand for data centers—essential for processing and storing vast amounts of data—has surged, leading to notable shifts in CRE investment and energy consumption patterns.
Surging Energy Demands
Data centers, the backbone of AI operations, are experiencing unprecedented growth in energy requirements. According to the International Energy Agency (IEA), global electricity demand from data centers is projected to more than double by 2030, reaching approximately 945 terawatt-hours (TWh). This surge is primarily driven by the energy-intensive nature of AI workloads, which rely on specialized hardware like GPUs for training and inference processes.
In the U.S., AI data centers may require an additional 10 gigawatts (GW) of power capacity in 2025 alone, surpassing the total power capacity of some states (RAND Corporation). This rising demand underscores the pressing need for more robust and sustainable energy infrastructure.
Implications for Commercial Real Estate
The expansion of AI and data centers is reshaping the CRE landscape. Investors and developers are now targeting regions conducive to data center operations, focusing on energy availability, land costs, and regulatory environments. For example, a Colorado-based developer recently announced a project to build a data center on 1,515 acres in Central Texas, expected to support over 2 GW of capacity.
This trend presents lucrative opportunities for CRE stakeholders. However, it also requires careful consideration of sustainability practices and energy resources to ensure long-term viability.
Energy Infrastructure and Sustainability
With energy demands soaring, concerns about grid stability and environmental impact are front and center. Former Google CEO Eric Schmidt recently warned about the strain AI places on power infrastructure, emphasizing the urgency for diverse and clean energy sources to support continued growth.
In response, tech giants are exploring alternative energy solutions. Google, for instance, has partnered with Elementl Power to build advanced nuclear energy sites, each designed to generate 600 megawatts of carbon-free electricity. These initiatives are part of a broader industry push toward sustainable, scalable power sources.
Conclusion
The AI boom is fueling major changes across both the commercial real estate and energy sectors. As data centers proliferate to support AI innovation, CRE professionals must navigate this evolving landscape—balancing investment opportunities with energy sustainability and infrastructure readiness.
Strategic foresight and proactive engagement will be key in capturing the upside of AI-driven growth—while mitigating the challenges that come with it.
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