The landscape of digital infrastructure in Atlanta is undergoing a significant transformation, positioning the city as a critical player in the burgeoning data center market.
56 Marietta has emerged as a pivotal site, housing one of the largest digital infrastructures in the Southeast, and serving as a magnet for data centers drawn to the region’s attractive logistics and support.
As technology titans aim to invest vastly in the artificial intelligence revolution, the role of data centers in Georgians’ daily lives is expected to escalate rapidly.
According to real estate services firm CBRE, metro Atlanta has become the hottest data center market in the country since 2023, climbing from being the sixth-largest hub to the second-largest in America.
Southern giants in technology and private equity are converging in the Atlanta area, eager to capitalize on a digital gold rush that has seen a dramatic increase in the construction of data center spaces every six months.
Georgia has proven to be an attractive destination for the data center industry due to its ample land, robust fiber optic infrastructure, and abundant power and water resources.
Coupled with lucrative state and local incentives, the region has successfully attracted developers, boasting hundreds of millions in tax savings.
However, this rapid development has not come without challenges.
Communities across Georgia express concerns over the noise, environmental repercussions, and the substantial demands these vast computing hubs place on power and water resources.
In response, Atlanta has implemented bans on data centers in various parts of the city, while residents voice apprehensions about the financial burdens that might accompany the centers’ establishment.
Diana Dietz, residing near one of the Southeast’s largest data centers under construction in Fayette County, articulated the public sentiment: ‘This is such a gold mine with Wall Street right now. Everyone is trying to get a piece of the action, and that really worries me.’
As the needs for AI and cloud storage soar, data centers are expanding dramatically, many requiring as much power as entire cities to remain operational.
Kerry Person, vice president of data center planning and delivery at Amazon Web Services, reflected on the industry’s meteoric growth, stating, ‘If you go back to 2006, I don’t think anyone understood what the size of this industry was going to be.’
The necessity for additional data center capacity is evident, especially in light of the AI surge, which has escalated demand significantly.
An analytical review by The Atlanta Journal-Constitution indicates a significant increase in the number of data center applications submitted across the metro Atlanta area, with a sharp rise from just six applications between 2020 and 2022 to 44 applications, including 16 in the early months of this year.
This trend is supported by local leaders who appreciate the lucrative property tax revenues data centers can generate, even after offering incentives to attract them.
Niki Vanderslice of the Fayette County Development Authority encapsulated this sentiment two years ago as she predicted that a new sprawling facility would yield over $40 million in annual revenue, thus easing the tax burden for residents.
With this unprecedented influx of data centers, Georgia is positioning itself at the forefront of the next technological revolution.
As Chris Clark, president and CEO of the Georgia Chamber of Commerce, noted, ‘Oil led the last century, data leads this century.’
The rapid growth of this sector has raised concerns about unchecked expansion, with requests for regulations arising in various communities amid fears of environmental issues and inflated electricity costs.
Chris Alasa, a resident in Atlanta’s Howell Station, summarized these concerns, stating, ‘I know that we need them and they’re moving at light speed with technology, but I’m not sure that our laws and our representation have caught up to that yet.’
Multiple project proposals are facing protests and petitions as local residents voice apprehension about the potential impacts on their quality of life.
Some locales have reacted with temporary bans on new data centers, while others have instituted measures to regulate their locations more strictly.
In legislative realms, discussions around a pause on a considerable sales tax exemption aimed at data center equipment have been met with extensive lobbying from industry stakeholders.
Georgia Power, the state’s largest electric utility provider, is preparing for a monumental expansion of its power generation facilities aimed predominantly at meeting the needs of data centers.
However, concerns linger over whether all this infrastructure development is necessary and whether residential customers will ultimately bear the costs, especially after experiencing multiple rate increases since early 2023.
Georgia Power and the Georgia Public Service Commission are working to ensure that data centers contribute fairly towards the infrastructure costs, thereby safeguarding residential customers from incurring additional burdens.
Nonetheless, the implications of these developments remain a significant topic for upcoming elections concerning two critical seats on the Public Service Commission.
Proponents of data centers argue that their immense investments position Atlanta as a central player in the digital revolution while simultaneously generating new revenue streams for local governments, despite some of these advantages being counteracted by incentive packages aimed at attracting them.
Estimates suggest that statewide incentives may amount to about $296 million in sales tax revenue waivers for this year, while local authorities have approved similar incentives leading to hundreds of millions in property tax savings in efforts to draw in data centers.
Pete Marin, CEO of T5, a Buckhead-based data center developer, highlighted the necessity of ensuring electricity expansion and local acceptance as fundamental to the industry’s future growth in Georgia.
He remarked, ‘This group of companies, it’s like a swarm of bees. They’ll go and find the next best state, and the demand will go there. And it’s hard to shift it back.’
Understanding the historical context behind why Atlanta has gained prominence as a hub for data centers is essential.
Long before Atlanta earned its current title, it was known as Terminus due to its status as the endpoint of the Western & Atlantic railroad line.
Even though the city faced devastation during the Civil War, its rail network played a crucial role in its recovery and growth into a logistics center.
The city evolved into a transportation hub, connected not just through rail but by the interstate highways and eventually becoming home to the world’s busiest airport.
The framework for digital communications developed alongside this infrastructure, with fiber-optic cables and necessary connections easily laid along existing routes.
Furthermore, the digital infrastructure in Atlanta received a significant boost during the 1996 Centennial Olympic Games, which enhanced the city’s fiber connectivity to accommodate international media requirements.
The establishment of carrier hotels like 56 Marietta facilitated more efficient management of fiber connectivity, essentially laying the groundwork for today’s data centers.
Nick Steen from Avison Young commented on the expansive connections born from these pivotal buildings in downtown Atlanta, highlighting their significance in the digital communication tapestry.
Additionally, Atlanta has become a crucial center for global payment processing, owing to its intricate fiber network.
The city’s geographic proximity to coastal regions also plays a role, considering that over 95% of internet traffic is routed through undersea cables, thus benefiting cities located near the coast.
Historically, the design of office buildings and municipal facilities often included dedicated storage spaces for computers, which have now been efficiently supplanted by large-scale data centers.
These facilities offer superior security and operational economies of scale while relying on extensive fiber connections to integrate into the national network.
With prior congestion in data center spaces driven by the demand in Northern Virginia, developers now perceive Atlanta as a logical alternative for expansion.
The surge in demand for data center space rapidly accelerated following the unveiling of OpenAI’s flagship platform, ChatGPT, in late 2022, further cementing Atlanta’s status as a strategic choice in the Southeast.
Mike Lash from CBRE’s data center solution team compares the U.S. data center market to a champagne pyramid at a wedding, where the apex remains filled (in Northern Virginia) with Atlanta and other major markets forming the second tier ready to absorb overflow.
The demand sparked by AI initiatives ensures that this ‘champagne’ continues to flow into the next tier, signifying the ongoing growth across the country’s data center landscape.
As communities navigate the influx of data centers, voices and questions about zoning regulations and land utilization become increasingly prominent, especially in rural areas experiencing discontent amid proposals for extensive projects.
Residents such as Brian and Stephanie Beck express their concern over the potential transformation of their idyllic forested area, with a significant $17 billion data center proposal named Project Sail threatening to develop 831 acres for industrial use.
The nearby community members express distress over the anticipated intrusion into their peaceful lives as they prepare for significant alterations to their surroundings.
Prologis, the industrial giant behind Project Sail, asserts that the site’s proximity to existing Georgia Power facilities makes it a suitable candidate for energy-intensive data centers, thus mitigating the need for introducing extensive transmission infrastructure.
Kent Mason, marketing officer for Prologis, emphasized that utilizing a site with pre-existing resources minimizes potential impact on the community.
Amid rapid growth, Chris Clark of the Georgia Chamber cautions against overreacting to concerns arising from development, reminding stakeholders that any rapidly emerging sector will face its challenges.
However, it is crucial for local governments and communities to maintain a balance while ensuring zoning codes adequately reflect growth and address resident concerns.
Some localities have responded to the swift development by instituting moratoriums, evaluating how zoning policies align with current needs.
While the demand for data centers continues unabated, bolstered by the ongoing surge in AI, it is clear that both opportunity and apprehension define the future landscape of this industry in Georgia.
image source from：ajc
