The Rise of Data Centers in the Metroplex
In the bustling metropolitan area of Dallas-Fort Worth, a remarkable transformation is underway. The region has emerged as a thriving hub for data center development, driven by the exponential growth in artificial intelligence (AI) and cloud computing technologies. As the demand for robust digital infrastructure skyrockets, the Dallas-Fort Worth area has positioned itself as a prime destination for companies seeking to harness the power of cutting-edge data processing and storage capabilities.
The factors behind this data center boom are multifaceted. “Demand is crazy everywhere,” says Phoebe Bernet, an associate at real estate firm CBRE, “but particularly in Dallas and Fort Worth, which ranks second behind Northern Virginia for data center growth.” The region’s abundance of available land, flat terrain, and the promise of ample power supply make it an attractive proposition for data center developers and hyperscale operators.
“There are specific reasons why Dallas, Fort Worth, this area, is getting a close look,” Bernet explains. “We have a ton of available land, it’s all flat and that’s attractive to developers and hyperscalers. And, for the most part, we have the power, maybe not right now, right this minute, but we will have the power eventually.”
Record-Breaking Data Center Construction
The Dallas-Fort Worth area has witnessed a remarkable surge in data center construction, with the region setting new records in recent years. According to CBRE’s latest North American Data Center Trend Report, the under-construction activity in the region totaled a staggering 472.1 megawatts during the first half of 2024, representing a nearly 73% increase year over year. Remarkably, 94.5% of this space under construction has already been released, leaving little flexibility in the market as overall vacancy shrunk to a mere 4.4%.
“Data center activity levels are unprecedented,” says Chris Herrmann, senior vice president with CBRE’s Data Center Solutions group. “Never in the history of our industry have we seen a greater number of hyperscalers and colocation operators scour the DFW market sites for the next wave of data center development.”
This unprecedented growth is undoubtedly a boon for the local economies, as data centers contribute significantly to the tax base. However, it also presents challenges in terms of managing the strain on the region’s power and water supplies. “One of the challenges data centers are facing is the available capacity that they use on the local grid,” explains Mohammad Atiqul Islam, an assistant professor in the computer science and engineering department at the University of Texas at Arlington. “These data centers cannot be in the middle of nowhere.”
Balancing Growth and Community Concerns
The rapid expansion of data centers in the Dallas-Fort Worth area has not come without its fair share of community concerns. Residents in the Panther Heights neighborhood of Fort Worth, for instance, have voiced their apprehensions about a proposed data center project on 121 acres near their community. Ericka Schwan-Ornelas, a Panther Heights resident, highlighted issues such as traffic, light pollution, energy consumption, water use, and noise as areas of concern.
“Many of us believe this land would be better used for a retail or commercial center,” Schwan-Ornelas said during a recent hearing. However, not all residents were opposed to the project, with some noting that the data center would not result in much additional traffic once construction was complete.
Ultimately, the Fort Worth City Council approved the zoning change for the data center, recognizing the significant economic benefits it would bring to the area. “That taxable value makes them very attractive to municipalities,” says UTA’s Islam, “because these data centers are not big in terms of creating employment. However, they do contribute to the local government through taxes, through business property taxes, because these sites have very expensive equipment in them and they are constantly upgrading.”
Innovative Solutions for Sustainable Growth
As the demand for data centers continues to grow, industry leaders are exploring innovative solutions to address the challenges posed by their energy and water consumption. “Many data center companies are looking at alternative sources for power, such as nuclear, natural gas and hydrogen,” says Curt Holcomb, executive vice president at JLL.
One notable example is Amazon Web Services’ acquisition of a data center campus powered by nuclear energy in Pennsylvania. This move allows Amazon to purchase carbon-free energy directly from the nuclear operator, leaving more power on the grid for other users.
Moreover, Holcomb highlights the unique position of Fort Worth in supplying natural gas to data center operators for on-site power generation. “There has been an increase in interest from data center developers looking to acquire land sites that have an abundant supply of natural gas, so they can place electricity-generating turbines fueled by natural gas on-site,” he explains. “This allows data center developers to work hand-in-hand with the Texas energy industry to devise creative solutions for powering these massive developments.”
As the industry continues to evolve, companies with data centers can also leverage the flexibility to switch to other remote data centers if a particular facility in the area is straining local resources. This adaptability helps balance the growing demands of the digital world with the needs of the surrounding communities.
Distinguishing Data Centers from Crypto Mining
It’s important to note that while both traditional data centers and cryptocurrency (crypto) or Bitcoin mining facilities are technically data centers, they serve vastly different purposes and have distinct characteristics. “Traditional data centers house enterprise servers, similar to equipment found in one’s personal computer, but on an industrial scale, as these centers are servicing entire businesses, or multiple organizations,” explains Holcomb. “Because of this, server downtime must be avoided at all costs, leading data center owners and operators to build in redundancy, both in terms of power and connectivity.”
In contrast, crypto or Bitcoin data centers are solely focused on “mining” electronic currency by using specialized hardware and software to solve complex, ever-changing puzzles. “Since progress can be paused while solving this puzzle, crypto data centers are able to be ‘turned off’ when necessary to conserve power,” Holcomb adds. These crypto facilities only require an internet connection and access to power, allowing them to be located in more remote areas if needed.
Embracing the Future of Data-Driven Innovation
As the digital transformation accelerates, the Dallas-Fort Worth area is poised to play a pivotal role in the data center industry’s evolution. The region’s abundance of land, power supply, and strategic location make it an attractive destination for both hyperscale operators and edge computing providers.
The IT Fix blog encourages readers to stay informed about the latest developments in data center technology and the factors driving their growth in the Dallas-Fort Worth region. By understanding the opportunities and challenges faced by this industry, businesses and individuals can better navigate the rapidly changing digital landscape and unlock the full potential of data-driven innovation. Visit https://itfix.org.uk/ for more insightful articles and expert advice on IT solutions, computer repair, and emerging technology trends.
