The rapid rise of artificial intelligence and cloud technologies is driving an urgent need for data centers nationwide, putting unprecedented pressure on the nation’s power grid. Leasing activity remains strong, but power constraints are emerging as the defining factor in site selection, prompting investments in grid upgrades, renewable energy and advanced on-site power solutions.
For one, Equinix, a digital infrastructure company and one of the largest publicly traded REITs with a market cap of nearly $80 billion, is exploring alternative energy strategies, including nuclear power and fuel cell deployments.
“We’re in the middle of an energy super cycle,” said Stu Thompson, SVP of global real estate at Equinix, in an interview with Raul Saavedra, head of data center advisory for the Americas at Colliers.
“Demand is rising at the fastest pace in years, and not just in our industry. Worldwide, everything is getting electrified and new and replacement infrastructure needs are growing, so cutting-edge energy solutions are a necessity.”
Nationally, data center vacancy has hit a record low of 1.7%, with nearly all new supply pre-leased. Hyperscale rents in key hubs are growing at double-digit rates and total hyperscaler capital expenditures are expected to surge 24% in 2026 to nearly $550 billion, according to Affinius Capital data and CNBC.
Power limitations are a considerable challenge across major markets. U.S. data centers consumed 183 terawatt-hours (TWh) of electricity in 2024, representing more than 4% of total U.S. electricity usage — roughly equivalent to the annual demand of the entire nation of Pakistan. By 2030, consumption is projected to grow 133% to 426 TWh, underscoring the critical need for reliable energy solutions.
Thompson noted that Equinix has begun funding and supporting advanced transmission upgrades in certain grids to enhance reliability and emergency backup solutions. The goal is to offer efficient and reliable support to both data centers and the broader grid, he said. Advanced fuel cells are also being deployed on-site, with more than 100 megawatts under contract at 19 U.S. data centers to support scalable, cleaner energy generation.
“Historically, we secured data centers to solve for proximity to connectivity, cultivating our digital ecosystems that make Equinix a strong partner for customers. But that model is shifting from location, our traditional real estate lens on data centers, to power,” Thompson said.
Global data center capacity demand is projected to roughly double current levels, requiring around $500 billion per year in capital expenditures and roughly $2 trillion in annual revenue to make these investments sustainable, according to Bain.
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