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Today’s rundown:

• JLL predicts the future of the industry with its new report

• Meta has HUGE spending plans for 2024

• Deals and Dev: Coldwar bunker/data center hits the market, Blackstone’s $25 billion DC play, Amazon in Mississippi,

• More Stuff: Energy islands, walking cars, containment whitepaper, AI hallucinations, and even safe football helmets

Est. read time: 5mins 45secs

JLL’s 2024 data center outlook report is here

Last week real estate research juggernaut JLL released their annual state of the market report for the data center industry. Below is a summary of what it finds.

Design

• Denser racks: Average rack density has been increasing over the past few years. JLL expects to see significant jumps in the coming years.
  Currently average RD in hyperscale data centers is 36kW/rack. It is estimated to reach 50kW by 2027.

• Wetter cooling: Air cooling may struggle to dissipate enough heat from denser racks. Rear door heat exchange and liquid cooling are methods gaining traction to deal with this issue.
  Cooling represents 40% of an average data center’s power consumption, and some providers have shown an up to 90% decrease in power consumption with liquid cooling.

• Efficiency through software: With average PUE falling at cloud, hyperscale and colocation data centers (average ratio is now 1.55), these large facilities will turn to software to maximize their efficiency. Term to look out for: “Software Defined Power.”

Power

• Grid Infrastructure: 1/3 of Europe’s grid infrastructure is over 40 years old and will cost an estimated $641 billion in investment by 2030 to meet sustainability goals.
  Meeting green goals in the US will require nearly $2 trillion in the same period. Thus JLL foresees continued challenges in sourcing power.

• Load shedding issues: Load shedding is a way to distribute demand for power across multiple sources when demand is particularly high. However, frequent load shedding puts additional strain on backup power sources, which can drive costs up and reliability for operators down.

Growth Opportunities

• AI: Eventually developers will build specialized data centers focused on training and tuning AI models. Until then, JLL projects that there is significant demand for retrofitting, optimizing, and redesigning existing facilities to help cope with the more demanding nature of AI.

Meta has plans to spend $37B on digital infra this year

Meta had a big year last year.

Their $135 billion in earnings in 2023 (16% higher than in 2022) outpaced analysts’ expectations and is spurring huge infrastructure spending plans for 2024.

AI and infrastructure enhancement

The tech giant is poised to significantly expand its digital infrastructure, with plans to invest up to $37 billion this year, marking a $2 billion increase from its previous forecast.

The move was announced alongside the release of Meta's financial results for the final quarter of 2023, highlighting a 25 percent revenue increase to $40 billion last quarter.

This increased expenditure is aimed at enhancing Meta's hardware capabilities to support AI systems.
CFO Susan Li said this: “We expect growth will be driven by investments in servers, including both AI and non-AI hardware, and data centers as we ramp up construction on sites with our previously announced new data center architecture.”

New DCs, new chips?

Meta is not only investing in the quantity of its infrastructure but also in its quality, with a redesign of its data centers to better suit the needs of the AI era.

These new data centers, currently under construction in Kuna, Idaho, and Temple, Texas, boast improved cooling and power management systems. Moreover, Meta has claimed to have reduced construction costs by 31 percent and cut construction times in half.

Meta is also exploring the use of its silicon in data centers to decrease its dependence on external GPU vendors like Nvidia, signaling a strategic shift towards self-reliance and optimization in its technological deployments.

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- Deals and Developments -

Chicagoland Bunker/Data Center Hits the Auction

A Cold War-era data center is up for auction outside Chicago. Century 21 is selling the former AT&T telecoms facility from the Cold War as a turnkey telecommunications campus or manufacturing asset. The building was constructed in the 50s as a hardened military facility and has supposedly been maintained as such.
You can add it to your portfolio in March; bidding starts at $600k.

Blackstone All-in for $25 Billion in Data Centers

According to Interesting Engineering, Blackstone, having bought QTS in 2021 for $10 billion, plans to spend $15 billion on data centers across the globe. The massive data center empire will represent only a small fraction of their nearly $1 trillion asset under management.
Since the QTS acquisition in 2021, Blackstone’s biggest hurdles have been community-based and regulatory. Local municipalities in high-growth places like Arizona and Ohio are often resistant to the massive campuses that Blackstone wants to build.
Read the full piece on Blackstone and QTS here.

Amazon to invest $10 Billion in 2 Mississippi Data Centers

The investment will be “the single largest capital investment that has ever been made in the state of Mississippi - by a lot.”
Roger Wehner of AWS the $10 billion will tap into the burgeoning tech sector across the state to create new, well-paying jobs and boost the state’s GDP each year.”

Amazon already has $2.3 billion invested in the southern state. To date, they’ve built five fulfillment and sortation centers, four delivery stations, five solar farms, a wind farm, and (most importantly) a Whole Foods.

- More to Explore -

1. A New Land? The Danes want to build artificial “energy islands” that would capture off-shore wind energy to be used to power data centers and other high-tech infrastructure. The project would feature the largest turbines positioned furthest from land than ever.
Here’s the full story from DCD.

2. A Step Forward… Hyundai is calling it the UMV (Ultimate Mobility Vehicle). The new “walking car” uses multi-joint legs as well as wheels to move. The vehicle is known as Elevate and will be able to climb steps, lift itself above water, and launch itself over gaps.
IOTWorldToday covers the proposed concept here.

3. If You're Interested in the Infrastructure Side… SubZero Engineering published a whitepaper on data center containment that is a surprisingly elucidating and informative document. It covers cooling, power deployment, and the physical structure used to keep the data center running at maximum efficiency.
Get smarter and read it here.

4. Why Does AI Hallucinate? We literally cannot figure it out. Right now randomly wrong, confidently asserted AI output, known as hallucinations, make up 3%-10% of all AI text output. Researchers have found these hallucinations to be frustratingly unpredictable, and as of now don’t have a solution for them.
A really interesting article on this research is here.

5. Look, A Topical Super Bowl Link at the End! Some players on the field at Super Bowl 58 will be wearing the Zero2-R Matrix ID Trench helmet from Vicis. The special padding inside is made up of a lattice-work structure that absorbs the impact of hits. It is supposed to be lighter and stronger than currently available helmet technology.

That’s it. Thanks for reading.

Let me know what you think by replying to this email. Also, sharing it with someone who loves data centers helps too.

- Taylor