From a small northwestern observatory…

Finance and economics generally focused on real estate

Posts Tagged ‘sustainability

Data Centers — How Many is Enough?

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Presently there are 4,235 “Data Centers” in the U.S. (Datacentermap.com) with 1,500 more under construction or in the pipeline.

According to McKinsey, the total global capacity demand (2025) is 82 gigawatts, which will grow to 219 gigawatts by 2030. Bloomberg reports that one-half of U.S. electricity demand growth in 2025 came from data centers.  In Virginia, data centers consumed about 26% of all electricity in 2025 (Pew Research Center) and Virginia data centers under construction surged 80% in 2025.  Where is the new electricity coming from?  Globally, solar energy covered 83% of electricity demand growth in 2025 (ember-energy.com).

A medium-sized data center will use about 110 million gallons of water per year for cooling, implying a total annual water usage in the U.S. alone of about 630 billion gallons per year.  For comparison, the average American household uses about 82 gallons of water per day, or about 4.19 trillion gallons of household water consumption.  Thus, the water usage of data centers will equal about 15% of domestic water consumption.

As of 2025, data center vacancy rates were 1.6%.  McKinsey estimates that total global data center investments will be $6.7 Trillion by 2030.  By comparison, the aggregate value of all U.S. stock markets as of January 1, 2026, was $68 Trillion (Siblis Research).

Admittedly, I utilize data center space for the massive work-file storage I’ve accumulated over the decades. However, this explosive growth is linked in no small part to AI. Philosophically, we’re still working out what society and civilization will look like in an AI world. When I was a young Midshipman, the Academy added a course in computer science to the curriculum. The Lieutenant teaching it said the most outrageous thing — that eventually, there would be a computer of some form or another on board every Navy ship. We found that statement to be incredible. Now, a half century later, wars are being fought by those computers. I remember when the first personal computers were coming out — I was on Wall Street at the time. Some forward thinking stockbrokers thought these would be great to have on their desks so as to use spreadsheets to impress their clients. Most of us thought this was a waste of money. How little did we know…

With that history behind me, I skeptical that we have yet to envision the full range of AI, just as we couldn’t envision the full range of the internet, PCs, on-line commerce, Netflix (and its hundreds of competitors), Google (and “googling” things), and a myriad of other uses we have for the internet today. For example, all of the research for this post came from Google, Bing, and AI (with substantive cross-checking, by the way). It’s also not lost on me that I’ve typed this missive directly onto an on-line blog that will never see ink-to-paper.

As always, if you have any questions or comments, please e-mail me!

John A. Kilpatrick, Ph.D., MAI

john@greenfieldadvisors.com

Written by johnkilpatrick

April 29, 2026 at 6:57 am