Are Numerous Huge Data Center Projects Coming to Pennsylvania?

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Here in Pennsylvania, we’ve heard a number of announcements of giant data center developments over the past couple of years.  Are these enormous complexes of massive data center buildings really coming to the Commonwealth?   Will our area be serving the artificial intelligence (AI) demands of the largest hyperscale service providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud?  

As data center operators ourselves, even with demand for enhanced data center resources to support AI we’re a bit skeptical. First of all, you don’t just plug into the power grid to receive 100 to 200 megawatts (MW) of power.  Access to that much energy requires years of cooperative planning between utilities, state regulators, and local authorities.   Some of the proposals we’ve seen involve building data centers near previously shuttered coal plants or even decommissioned nuclear reactors at Three Mile Island. It seems unlikely that many of these schemes will meet regulatory requirements or pass public scrutiny.

Secondly, such announcements are hardly unique to the Keystone State, as hundreds of such proposals have been floated all over the country and the world.  Yet the Dodge Momentum Index, which measures construction projects entering the planning stage, has shown weakness this spring, declining nearly 7% in March with softness in the data center sector taking much of the blame before bouncing back with 1% growth in April with data center planning cited as a strength.  There’s some choppiness out there, and some previously announced projects have clearly stalled. 

There is also growing buyer’s remorse on the numerous gargantuan data center projects in Northern Virginia, where many believe the extensive data center development there has diminished the quality of life.   

 Amidst all of these mega-developments there is still a big role for local colocation providers like Direct LTx in Reading. These established colocation data centers provide economic benefit to the community, serving a wide array of local and regional businesses as well as government entities. Although we, like our customers, are rapidly developing sophisticated AI capabilities and strategies, we will never become a disruptive mega-AI factory like some of the proposed projects we read about.

No matter how the future of data centers develops in our area, Direct LTx will still be here serving Eastern Pennsylvania enterprises by providing the IT infrastructure backbone on which their customers rely.