The Impact of AI and data center growth on industrial builds in the Midwest
The Midwest United States is experiencing a boom in industrial, data center construction due to the rise of artificial intelligence. While artificial intelligence lives online, the machines and computers that store data and train new AI models need a place to exist.
The companies expanding have a large grasp on this industry. For example, Amazon is constructing a $11 billion data center in New Carlisle, Indiana, and Google is following suit with its $2 billion facility in Fort Wayne, Indiana. On a smaller scale, these companies are affecting the people living in the area, for better or worse.
What does this mean for commercial real estate and the people in surrounding areas?
Surely, for CRE, this is changing the game.
Larger companies moving into smaller towns could raise surrounding property values, potentially ridding residential or empty spaces to create room for larger industrial data centers (NAIOP). For commercial real estate companies specifically, this creates more opportunities to work with new clients while creating new economic energy in their region.
Residents in the area might experience frustration with the switch to a more industrial look, but in some ways, it may bring improvement to the areas changed.
Land previously zoned differently may face changes due to new rules and restrictions on constructing data centers. Because this type of property is relatively new, the new developments may challenge long-standing use zoning practices (Lightbox).
Microsoft is planning to build additional data centers in the Midwest, and their $3 billion investment in Wisconsin will create 2,300 construction jobs, with 2,000 permanent warehouse jobs to follow (ABC News). This not only increases the region’s workforce, but also increases the demand for more housing and infrastructure.
In addition to the boom in jobs, the new data centers will demand a revisit to infrastructure details to ensure the area is built to handle industrial spaces of this size and magnitude. Local power, water, and connectivity will be essential in the success of these data centers, but it would widen the bandwidth for town residents.
Data centers are growing in size from just a decade ago, growing from 30 MW [mega-watt] facilities to 200 MW, which is significantly larger than that of a decade ago.
As AI-driven industrial growth continues to shape the Midwest, commercial real estate professionals and residents must navigate a balance between economics and community impact. While data centers bring new jobs, increased property values, and infrastructure improvements, they can also pose challenges related to zoning, environmental concerns, and changing landscapes.
The AI revolution is driving a fundamental reimagining of data center infrastructure. As AI technology continues to advance, data center design and operation will need to evolve in parallel, creating opportunities for innovation and technological breakthroughs.
The transformation of data centers to support AI workloads represents one of the most significant shifts in infrastructure design since the advent of cloud computing. Organizations that can successfully navigate this transition will be well-positioned to leverage the full potential of artificial intelligence while maintaining operational efficiency and environmental responsibility.
AI’s influence is no longer just digital; it is reshaping the physical world.