Northern Virginia remains the world’s data center capital — here’s how it got there

Real estate firm JLL’s annual data center report is out, and Northern Virginia remained the largest data center market in North America last year, with record growth.

Northern Virginia has now absorbed over a gigawatt of data center capacity in the last three years. A gigawatt is equal to enough electricity to power about 750,000 homes, in the case of data centers powering endless racks of high electricity demand servers and other computer equipment.

But Northern Virginia is not just the largest data center market in North America. JLL lists the top five data center markets globally.

“Northern Virginia, Singapore, Tokyo, London and Chicago round out the top five. To put that into context, Northern Virginia has 3,400 megawatts of data center inventory, which is three times larger than the next biggest market, Singapore,” said Michael Hartnett, senior director of research, strategy & insights at JLL.

Northern Virginia had its third straight year of record data center absorption, with 163 megawatts at multi-tenant data center inventory and 203 megawatts of single tenant inventory delivered in 2022.

How did Northern Virginia end up being the data center capital of the world?

“If you go back to the 1990s, Northern Virginia was really the telecomm and Internet capital of the world. It was home to telecomm giants like MCI and WorldCom and it was the headquarters of American Online. These Internet pioneers really built an extensive fiber line network across the region,” Hartnett said.

Fast forward to the early 2000s, when the aftermath of the dot-com bust wiped out many fledging Internet companies and led to the bankruptcy of WorldCom and others. Even so, Hartnett said there was a silver lining.

“The fiber network laid by those early pioneers really put Northern Virginia on the map and with a head start position in terms of supply for data center demand, and that began to take off moving into the 2000s,” he said.

The next chapter for data center growth will be what JLL calls the artificial intelligence gold rush. As AI becomes more prevalent, it will lead to significant demand for power in data centers. AI takes a huge amount of computing power and massive resources to run artificial intelligence models.

Computer servers generate a lot of heat, and AI density will create a tremendous amount of heat. JLL said it is seeing innovations in technology, such as liquid cooling.

JLL’s 2022 global data center market report is online. It requires registration, but is free.

Jeff Clabaugh

Jeff Clabaugh has spent 20 years covering the Washington region's economy and financial markets for WTOP as part of a partnership with the Washington Business Journal, and officially joined the WTOP newsroom staff in January 2016.

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