Market Trends of Phoenix Data Center Industry
Cloud computing is anticipated to hold a significant share
- The growing adoption of cloud applications, artificial intelligence (AI), and big data is driving the demand for data center construction. As more businesses and organizations shift their operations to the cloud, they require larger and more advanced data centers to support their needs.
- According to Oracle, a new Oracle Cloud Infrastructure (OCI) region will formally begin operations in Chicago in December 2022. The new region, Oracle's fourth in the US and 41st overall, is a public cloud region. The company also operates two general United States Government regions, three Department of Defense-specific United States Government regions, several United States National Security regions, a TikTok plant in Texas, and areas in Ashburn, Virginia, Phoenix, Arizona, and San Jose, California.
- For instance, the National Science Foundation launched the AI Research Institutes program in 2020. Since then, USD 360 million has been distributed to 18 colleges in 40 states through this program. An ecosystem-based strategy can generate AI ideas and bring AI entrepreneurs to market. US federal agencies proposed USD 1.7 billion for non-defense AI research and development in fiscal year 2022. According to the National Security Commission for AI, non-defense-related AI research and development should get 32 billion USD each year by 2026. This is likely to enhance the region's demand for Data Centres.
- Furthermore, the increasing need for data privacy and security drives the demand for data centers. With the rise in cyber threats and data breaches, businesses and organizations are seeking secure and reliable data storage and processing solutions, which advanced data centers can only provide.
- The growth of cloud applications, AI, and big data drives the demand for advanced data centers. As businesses and organizations increasingly rely on these technologies to support their operations, the demand for data center construction is expected to grow. This presents a significant opportunity for businesses and investors looking to enter the data center market.
Understand The Key Trends Shaping This Market
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Rising Adoption of Hyperscale Data Centers
- The rising adoption of hyperscale data centers is a significant driver of the data center construction market. Hyperscale data centers are large-scale facilities that are designed to support the massive amounts of data processing and storage required by modern businesses and organizations.
- For instance, in May 2023, As Prime Data Centres prepares to build its first facilities in the market, new hyperscale data centers are heading to metro Phoenix. The business intends to invest $2 billion in constructing a 210-megawatt, five-building campus in Avondale, Arizona, spanning 1.3 million square feet.
- Further, Aligned Data Centres, a leading technology infrastructure company providing innovative, sustainable, and adaptive Scale Data Centres and Build-to-Scale solutions to global hyperscale and enterprise customers, announces its planned development of PHX-05, a new data center on its flagship hyperscale campus in Arizona. The greenfield deployment is expected to match an aggressive construction timeframe in response to increased capacity demands and hyperscalers in the greater Phoenix region's interest in Aligned's intelligent and adaptable infrastructure solutions.
- The deployment of hyperscale data centers will likely increase in the future years, fuelling data center demand. This is a substantial potential for firms and investors looking to enter the data center sector, particularly in locations where cloud-based services and applications are in high demand.
