Artificial intelligence is the transformative technology of our time. As argued in the Brookings Press book, “Turning Point: Policymaking in the Era of Artificial Intelligence,” it is powering applications in finance, health care, education, transportation, defense, and e-commerce, among other sectors, demonstrating the importance of planning for future AI data centers. AI’s ability to process large amounts of information and act independently on that basis is altering communications, service delivery, financial transactions, administrative processing, and a host of other areas. 

Undergirding this growing use of AI is the need for state-of-the-art data centers. This paper examines the future of these entities. It examines what they are, their numbers and distribution, the different types of centers, financial investments, barriers to development, workforce impacts, economic implications, and considerations for guiding their future growth. Briefly, we argue for a framework for data centers that addresses challenges such as access to critical minerals, workforce shortages, community benefits, permitting reforms, energy and water needs, electric grid investment, national security considerations, and geographical placement. Improvements in these areas will be crucial to ensuring a smooth transition to a digital economy. 

What Are AI Data Centers?

AI data centers host a large number of file servers and networking equipment that can store, process, and analyze text, images, code, and other information sources. Guided by large language models (LLMs) and machine learning, data centers can parse through these materials and act autonomously upon the derived insights. The applications that are hosted at these facilities can summarize text, edit photos or videos, examine data, code software, and perform many administrative and financial tasks in real time. These applications offer tremendous convenience, efficiency, and effectiveness to consumers, businesses, and governments.  

“Hyperscale” data centers typically have more than 5,000 file servers within their facilities and can house equipment utilized by many different organizations. With the large-scale growth of generative AI, there is tremendous reliance on data centers that process information quickly and with low latency to enable the use of a wide range of AI services and agents. It is estimated that the generative AI market is accelerating around 40% a year and is projected to increase from $43.9 billion in 2023 to nearly $1 trillion in 2032. This high AI growth rate, generated by skyrocketing digital demand, makes it imperative to expand data centers.

Read the full article about future considerations for AI data centers by Nicol Turner Lee and Darrell M. West at Brookings.