Key Takeaways:
North American data center demand reached 25 gigawatts (GW) of absorption in the first half of 2026, while vacancy has fallen to 1 percent or below, according to JLL’s North America Data Center Report Midyear 2026.
However, this rapid growth isn’t due to AI alone. Society continues to create and consume more data, with data creation growing at roughly 23 to 25 percent annually, says Sean Farney, vice president of data center strategy at JLL. The bigger picture is that data center development is basically responding to the increasing demand for and dependence on digital services.
“This is similar to what happened 100 years ago or so with the introduction of electricity,” Farney says. “Once people saw the benefits of electricity, they wanted to have electrical devices and they consumed more electricity. So, we’re dealing with a very similar kind of societal force. The industry is positioned well to take advantage of this new paradigm and the way we operate as humans.”
The ongoing shortage of land and power in traditional data center markets is changing how developers select sites. Historically, development was clustered around major metropolitan or telecommunications hubs such as Chicago, Dallas, Atlanta, Washington, New York and Los Angeles.
Farney describes this as a shift towards what he calls a “de-marketization” of data center site selection.
“So, it’s forced this new, what I call this new de-marketization of data center site selection,” Farney says. “It used to be there were things like markets, a real estate topic. Now the data center developers are simply going to where they can get to revenue fastest.”
Factors influencing site selection now include power availability, fiber and network connectivity, land, taxes and regulations and workforce availability.
New areas for data centers are being considered as well, including West Texas, Ohio, Louisiana, Indiana and Wisconsin.
Moreover, developers are becoming more willing to solve individual site constraints rather than limiting development to established markets. However, this geographic shift poses a second issue: What happens when major infrastructure projects enter communities that haven’t traditionally hosted them?
“When a data center comes into town, a whole bunch of jobs are created,” Farney says. “I built a data center in suburban Chicago years ago, and I kept 600 union electricians busy for more than nine months working triple shifts. That supported a lot of families, putting a lot of meals on tables.”
Similarly, he points to large multi-gigawatt developments in West Texas as examples where entire towns are being employed for development projects.
“JLL hired more than a couple of 100 people to staff a large project in Abilene over the last few years,” Farney says. “We work with local trades, local colleges and so on, to find, train and hire folks.”
While AI is the fastest-growing segment, Farney cautions against treating it as the only source of growth. Traditional cloud-service-provider data centers continue to be built as well.
AI facilities can operate at 50+ kilowatts (kW) per cabinet, he says. They also require much higher power density, and liquid cooling is becoming increasingly important for those environments. Farney adds that liquid cooling can be about 40 percent more efficient than moving air around in a closed-loop system.
The bigger idea is that the basis of design for data centers is changing rapidly, as mechanical and electrical technologies have evolved significantly in just the past few years.
Additionally, enterprises are reconsidering older on-premises data centers that had previously been emptied in favor of cloud computing. Some of these facilities may be retrofitted to support higher-density AI workloads.
“It generally saves money over the long term for the enterprises,” Farney says. “It’s an adaptive reuse project. It’s not going out and trying to build a new data center. You don’t have to compete with the big guys. So that’s a great solution to some of this low vacancy that we’re seeing across the US.”
Another consistent constraint is utility power availability. Developers are increasingly exploring their own power generation, including natural-gas generation, rather than waiting on traditional utility connections. This further illustrates how the industry is adapting its infrastructure strategy to keep pace with demand.
Overall, the industry has historically been relatively conservative about mechanical and electrical systems because reliability is paramount, says Farney. However, pressure to bring capacity online is accelerating the adoption of cutting-edge technologies.
“I really like to emphasize the massive change in data center basis of design,” Farney says. “We’ve experienced more change in the last three years from a tech perspective, the mechanical and electrical tech that runs data centers than we saw in the prior 20 years. I see all kinds of fascinating new technologies as part of this creative destruction as we move faster.”
Jeff Wardon, Jr., is the assistant editor for the facilities market. With more than three years of experience, he covers topics including technology, wellness, sustainability and emerging industry trends. Connect with him on LinkedIn.
