Relocation of AI Infrastructure from Silicon Valley to the Midwest Regions
In the rapidly evolving world of digital infrastructure, a significant rethink is underway, driven by the influence of generative AI. As the focus shifts from what to build, to where to build, tech leaders are strategically weighing all factors to sustain the next wave of AI.
The top challenge in site selection for AI factories is grid availability, not talent or land. Regions with access to abundant, low-cost power, especially from renewable sources, can provide a significant edge in total cost of ownership (TCO). Northern states, for instance, can leverage hundreds of days of "free cooling" per year, using outside air to reduce energy consumption for cooling.
Non-traditional locations offer minimal land constraints and a streamlined permitting process, allowing for quicker and cheaper land acquisition and project approvals. Building in these regions can significantly reduce cooling overhead, a top priority due to AI hardware generating intense heat. Liquid cooling has become a necessity for modern AI factories.
Traditional tech hubs may no longer be suitable for tech leaders. Regions once reliant on agriculture or manufacturing are now training the next generation of technicians and attracting long-term investments that ripple throughout the broader economy. The design of an AI factory prioritizes modular scalability and innovative electrical architecture, requiring ample, available land.
Proximity to key clients, pre-existing talent pools, or established network connectivity may be reasons for building in traditional locations, but may come at the cost of higher operational costs and slower build times due to land scarcity and complex permitting processes.
AI factories require a new approach to site selection due to their compute-heavy workloads. The Applied Digital AI infrastructure, led by Wes Cummins, is a testament to this shift. Located in Las Vegas, Nevada, the company considered factors such as energy availability, climate, and infrastructure to support large-scale AI operations when deciding to build there.
By turning land into engines of development, tech companies can put local resources to work and open doors for people and communities to thrive for generations. In the process, they foster a true partnership between technology companies and communities, accelerating infrastructure delivery at the pace AI demands. AI factories can create lasting job opportunities in rural areas, including skilled trades, network engineering, operations, and logistics.
As we navigate this new era of technological advancement, it's clear that the next wave is taking root in places that have been historically overlooked. Proactive government initiatives can help sustain this growth, ensuring a bright future for both technology and the communities that embrace it.
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