Commercial Real Estate morning News Show
Leaders in the commercial real estate industry discuss the latest news and provide insights that you will get nowhere else!
Commercial Real Estate morning News Show
Commercial Real Estate Morning News Show - Data Centers
Join us on an enlightening journey through the turbulent and exciting world of data centers as we explore the monumental $500 billion investment being made in the U.S. under a new presidential administration. Hear from industry insiders like Howie Berry and Stephen Schlenker as they unravel the complexities behind deploying 40 million GPUs and the groundbreaking self-powering data center in Abilene. Discover the often-overlooked nuances of data center operations and how they impact major tech giants like TikTok, shedding light on the intricate dance between technology and political landscapes.
Navigate the energy challenges faced by tech companies as they expand into Europe, focusing on the Mediterranean and Nordic regions. Gain insights into how leading lights such as Microsoft, Amazon, and Google balance rapid growth with sustainability in the face of stringent EU regulations. With insights from the recent PTC conference, we highlight the dual focus on growth and sustainability, particularly in emerging markets like India, and discuss how cultural attitudes towards entrepreneurship and sustainability influence the pace and nature of business growth.
Explore the intersections of data center strategies with the rapidly evolving blockchain and cryptocurrency landscapes. From building robust data centers in disaster-prone areas to the disruptive potential of blockchain, we discuss how these developments are reshaping financial markets. Hear about BlackRock's Larry Fink's vision for tokenization and how meme coins, with their intriguing and baffling appeal, are stirring both skepticism and curiosity. Whether you're a tech aficionado or a financial market enthusiast, this episode promises a compelling look at the trends shaping the future of technology and finance.
We wait. All right, we have to wait for the big red live show. We're live y'all, we're live All right. This is the Commercial Real Estate News Show and this is my data center group. Thanks for being here. Y'all, Thanks for joining me. We're going to talk data centers today and all sorts of things. A couple of things about Trump. That guy is just making noise. He's been president for a whole three days. He's out there making noise, isn't?
Speaker 3:he, love him, love him, love him. He's affecting our world. I can tell you that, in a great way, we were already on fire and now we're really on fire.
Speaker 1:You're in fuego, en fuego. All right, before we get started, let's everybody introduce themselves. And Howie, my co-host, howie, go ahead, sir.
Speaker 3:Howie, here again. Avis Young run the National Data Center Platform for AY. We are focused on all things data center, real estate and world-changing AI.
Speaker 1:All right, that's awesome, and our newcomer, stephen.
Speaker 4:How's it going? Stephen Schlenker, I work under Howard Berry at AY and I was a data center hawk for about five years as a senior analyst in the space, working with colo groups, hyperscale end users, brokers, investors and kind of just a neutral party that spent a lot of time talking with everybody in the industry about what their challenges were and where the pain points were, and now I'm helping Howie and his team solve some of those solutions for some of these big groups.
Speaker 1:You went over to the dark side. You started slinging real estate. Look at you.
Speaker 4:Yes, so I'm very thankful to be where I'm at.
Speaker 3:It's all good Learning how to eat what you kill.
Speaker 1:And Jay, and Jay.
Speaker 2:And Jay Huzzy. Here I'm with H5 Data Centers. I'm fortunate to be the director of sales in Northern California and I drive sales to all of our data centers throughout the US.
Speaker 1:Awesome.
Speaker 2:Happy to be here again this week.
Speaker 1:Yay, all right, very cool. Well, in case you were hiding under a rock and did not know, we have a new president in the United States, and he came out yesterday with all his buddies with this new Stargate. It's Stargate, I feel like that was the name of a movie, though, wasn't that a name of a movie?
Speaker 3:It was a movie with uh kurt russell. Yes, there was a stargate movie oh man really yeah, long time ago steven's like they went through and they ended up in egypt near the pyramids or something, right, yeah, that was a good one. I need to go back and watch that.
Speaker 1:Yeah, he's like who's Kurt Russell? No, I'm just kidding. So Stargate, so $500 billion. And then I love the drama, like when all these billionaires get together and then there's always drama. And now Musk is all hurt because you know he wasn't included in the meeting.
Speaker 1:I don't know what he's talking about, willis, but OK, besides the drama with the billionaires, 500 billion dollars is nothing to sneeze at and that's actually fairly cool. And I'm assuming they'll all come up with the money for this 500 billion dollar investment, right? I mean, if the government's sponsoring it, it's going to be pretty easy.
Speaker 3:Amy. The way we look at that is, you know, $500 billion. They're planning on deploying 40 million GPUs and that's going to be around 2 million GPUs per data center.
Speaker 3:The first launch of that is going to be Caruso's data center in where is it, steven, abilene, abilene, which they're utilizing flare gas that's easy for me to say to self-generate power on site, and they're tied to the grid, I think as well. Uh, but they are deploying 1.2 gigawatts, so if you think about it, it's a gigawatt for every 2 million gpus. Uh, and this is this is pretty big. This is this is huge yeah, it's so funny.
Speaker 1:I read the story and the mayor of abilene like, like, nobody gets data centers, like let's just be real, nobody understands it at all. But the mayor of Abilene was like, yeah, we didn't even realize how big it was going to be.
Speaker 2:I mean, you know that's, that's part of the data center world, right? Nobody, really, unless you've spent time in it, really gets it it's. It's just amazingly, uh complicated yeah, for sure.
Speaker 1:I mean, uh, but I think you know, and anybody who, and once the once the township gets wind of it, and then they understand how much power actually has to be done. But if it's self-generating, then who cares? Right, no one cares, like if it's gonna.
Speaker 2:I mean, yeah, that's the, that's this, that's kind of the sticker on all these different uh articles. Right, does it come down to taxpayers paying for this and how you know where is it gonna really be funded? So, at the end of the day, it can't be on the taxpayers.
Speaker 3:If yeah, if it's, if yeah I love the conversation trump had where he said look, tiktok, it's only worth the value of America. So without America you don't have TikTok, and it's probably worth a trillion dollars and America should get $500 billion. This is convenient that we all of a sudden have a $500 billion AI 40 million GPU deployment. But I just found that really interesting because it's just like business. Hey, tiktok, you don't survive. Without America, there's no value.
Speaker 4:Well, in EU, tiktok is trying to play nice with the governments over there. None of the social media companies are owned by groups in the EU or in the UK, but TikTok is trying to put a better foot forward for them than they had in the US. They're trying to pitch into community projects. They're trying to play nice with what they're uh, doing over there because they they know that it's important to have these footprints in the western world and if they lose the us, you know that's how I mentioned. That's most of it. But they do have a presence in the eu as well so so the the eu is the plan b, okay totally so they're doing a
Speaker 1:pr campaign. Well, it's smart.
Speaker 4:It's smart, I mean well, they're trying to do it all, like the other groups that have global footprints, but they are uh. They've learned from some of their lessons as far as not playing nice in the us all right yeah, no, I really don't like to talk politics that much, but we always.
Speaker 1:We can't avoid it, like this dude, but doesn't anybody? Can anybody see the hypocrisy? Like we're going to, you know, we're going to like tariff China, like we don't like China, but somehow TikTok's OK? But that was the whole big thing about TikTok being banned. Like they were banning it here. The governor was banning TikTok in any you know state building. Nobody could use it. Universities Nobody used TikTok in Texas, right, because he was a Trump fan. And now he's like no, it's okay, tiktok's okay.
Speaker 3:But how many other, Amy, how many other platforms are selling our data to China?
Speaker 1:Well, who knows, they might all be like you know maybe, maybe Meta grabs a lot of data, I know. Everybody's got a business. Yeah, I don't know. I mean it's all going through us data centers, so I don't you know who knows Like who's selling it. When'd you, when'd you?
Speaker 2:they're all H5 data centers, right? Yes, they're all at H5 data centers right. Jay, yes, they're all here, that's right. I don't get into the politics part of it either, but the hypocrisy does not escape me at all. It just is funny how flip-floppy it is and he earned a full flop on that. He, as in President Trump, earned a full flop on the TikTok thing.
Speaker 1:He totally flopped on that one Yep for sure For sure, all right.
Speaker 1:the tick tock thing, he, he totally flopped on that one. Yep, for sure, all right. So there's another article about how, uh, so biden before, when he was doing all his pardoning, he also happened to, like you know, write a thing, an executive order for data centers to be on federal land. We kind of talked about that on this show, um and then, so I'm assuming trump will keep it around. I mean it makes sense, right, he might keep. I mean he's not going to just X and A everything Biden did, or do you all think we were, we were up in the air about that one having data centers on federal land? Do you think anybody will participate in that? I think you still should be at Old Faithful. I think we should have a data center.
Speaker 4:No, no, stephen, no, we'll see. I mean, the government has quite a bit of land Me and Howie are in the powered land business but I know that there's a lot of challenges. I mean, there's a lot of challenges to delivering power, there's a lot of challenges to delivering fiber to these sites, and so it's, you know, they can't just go up anywhere tomorrow. They, you know, it's really a Goldilocks problem of it has to be just right. It can't be too much this or too much that. And so there's, we're seeing those constraints loosen on search requirements and people are willing to build with timelines that are further out, because they know that's all that they can do. But I think that that adoption, especially moving certain things to federal land, is going to take some time and it's going to have to be in the right markets.
Speaker 4:I mean, we see most of the government deployments currently in and Jay knows this as well because they're very present in these markets, in the Denver market, the San Antonio market and the Northern Virginia market, and so whether it's defense contractors or cloud contracts with Oracle, microsoft, amazon, those are the primary three markets where those happen, and so I would say that Albuquerque, albuquerque, that's where I'm from, and there's a yes, but there's some yeah, there's some national lab issues as well, but I would say that we will see if there's, if there's a shift to that, but I think it'll take a little bit of time.
Speaker 2:I agree with that. I'd agree with that time frame too, and or that longer time frame, and they wanted this to be operational by 2027. I think it's going to take that long for them to identify and say, okay, I'm a land, if you ask me, I don't see an operational data center. If they're just doing this now, it's not enough time. It takes a while to do these.
Speaker 1:Yeah, it was a little half-hearted, kind of oh thanks, you know yeah data centers don't even like ground leases.
Speaker 4:Why would they like government-owned land Unless we see a shift to the government owning and operating their own data centers at more of a rate than they have? Because, for the most part, Uh-oh, oh, stephen, you froze.
Speaker 3:That was a great freeze.
Speaker 1:Yeah's a great perfect timing.
Speaker 3:Right that was just me.
Speaker 1:I thought it was me again, because last year I froze like this we all get a candid.
Speaker 2:We do we do how you should get. You should get a shot of this. You get a screenshot.
Speaker 1:Put it on his id put it up in the office there he is, it's recorded.
Speaker 3:We got it back. We were laughing at your freeze.
Speaker 4:It was pretty good. Oh great, we got a good screenshot of me. Yeah, yes, but they've mostly primarily leased these facilities. They do have some that they own and operate on their own land, but I would I would say we're going to need to see a shift in in that before people build on that land, and it's going to be government specific stuff. I think it's going to be difficult to navigate those contracts. So we'll see how they start off.
Speaker 1:But we need to see it happen first. You mean the federal government is difficult to negotiate with? Are you kidding me? They're just so easy Like what.
Speaker 4:Well, I think it's. I think that people get a lot of money from negotiating with the government, whether you're a weapons contractor or, potentially, a data center Well that's true. Or attorney. I think that those contracts are very good For sure, oh Samuel is watching us from France.
Speaker 1:Hey, Samuel.
Speaker 3:Hey Samuel, hey Samuel.
Speaker 1:PropTech France, which actually I'm glad he's watching because, Samuel, I don't know if you didn't know, but there was a story out and I didn't send it to these guys. But let's talk a little bit about data centers in Europe. Right, Germany has been the big dog for a long time, but I see in France, Samuel, there's like four data centers being developed in France, so it's interesting to see. You know everybody in the AI wars, but Europe is trying to keep pace, sort of.
Speaker 1:I mean if you look at the like US, we have 5,000 data centers. Nobody's catching us Like nice, try, try, like we got way too damn many.
Speaker 3:But yeah but they're like there's 500 in germany or like that, that's number two, or uk or whatever right, there's some difficulties around and I was just listening to the podcast it's not your father's data center great podcast, anyway, it was a ptc and they were talking with a bunch of european uh guys in the data center industry and they were talking about how difficult it is to get data centers done. And I know I'm going to I'm going to lead it to Stephen, because Stephen just got back from PTC, which is the Pacific Teleconference, which is the data center Super Bowl really of the industry, where everybody meets up and steven just got back from there and I'd love to hear what he heard. But, um, I did hear that that um, europe, uh, is particularly having a difficult time expanding um the the data center market. Greece is getting a little bit better and there's a few projects going on there, but, and maybe Spain I don't know about France you mentioned France, amy, but it's kind of interesting.
Speaker 4:Yes, so just quick overview of Europe. The primary markets. They're considered the flap D market, so that's Frankfurt, london, amsterdam, paris and Dublin.
Speaker 4:And so when we look, flap D and so those were the primary markets and we would see a lot more investment centralized in the primary markets in Europe. And what's happened is there's been a lot of growth kind of south towards the Mediterranean and north in the Nordics, where power, where there's lots of hydropower and it's very cheap and the issue is power generation and also just we're looking at these areas and it's just harder to get things done. We talk about California regulations, but EU regulations are also very tough to navigate and I think that culturally, people in the US are much more, there's much more of an entrepreneurial spirit of hey, if you can get it done, we're going to get it done. And the Europe is a lot more about culture and tradition and they're not going to change historical things. They don't want to change the landscape.
Speaker 4:You know, they have more time off in the Nordics than we do, as we've all thought about living out there to get an extra month off at times. But because that attitude is different, they're not adapting to the AI growth as quickly. And you know, these companies have learned that they just have to wait. Microsoft, amazon, google, oracle, they all understand meta that if they're going to get power in this market it's going to be 2030. And that's it. And they just have to to wait in line. And so the prices are a lot higher. But, um, and it's part of the reason that they're they're just, they are growing. But in general, from an investment standpoint, a lot of groups uh, are they discount the eu in some sense because they can get higher margins, but you really can't scale the same way that you can in the us, right?
Speaker 1:Yeah, interesting.
Speaker 4:Yeah.
Speaker 1:I just I find it, I find it. You know, of the markets you would think I don't know, but there's a lot of, there's a lot of infrastructure over there and I guess they just don't have as much space. I mean, we got a lot of land over here, we got a lot of a lot of stuff, but I think it's more just a.
Speaker 4:And it's power. They they're not willing to bend on the clean energy stuff that they've planned and these hyperscale groups are starting to be more uh. They're having to learn to potentially be more flexible and to kind of maybe work on these big ppa agreements, but when they all announced that you know five, six years ago that they were all going to be clean by neutral carbon neutral by 2030.
Speaker 4:They didn't expect the growth that we're seeing right now, and so it's really hard for them to keep up with that, and there's been a lot more flexibility around sustainability in the US. Actually, I have some great points on that, but I'd love to hear what Jay has to think about that and what he's hearing.
Speaker 2:In Europe.
Speaker 4:In general from sustainability standpoint.
Speaker 2:You know we get a lot of questions for customers about sustainability. We, you know, we try to be as sustainable as we can with our sites, like we'll have some regeneration or not regeneration, but we'll have some solar power at some of our sites. And you know we do have our site in Quincy does use the use of water. So for I'm sorry hydropower yes.
Speaker 2:So sorry I was stuck on that. Yes, hydropower, so yes, that's sustainable. But we're kind of at the mercy of the utility. You know, we, we take utility power. So whatever they're providing to us is what we're using and as a provider, like I said, we can do things to kind of augment that. But our reliability is on the utility. So if they're giving sustainable or different alternative energies, then that's what we can use. But we do see a lot of it from customers. It's definitely something that's moving into customer requests and customer requirements.
Speaker 1:So on the sustainability side is the number one investment. If you're going to make a sustainability investment, is it just on-site power generation? So have you already pretty much figured out everything that's happening inside of the building and optimized your pwe and then all those other things, and then you're like, okay, what else do we do, or is it? I mean, or is it.
Speaker 4:It's a two-pronged approach. I mean, one of my favorite quotes, actually, from this past week, when I was at ptc conference, which is there's just lots of ceos talking, uh, the one who did this was, uh, the head of adani connects. Uh, who is his? He said to go by call him jj because his, his name is harder to pronounce, but he's doing the uh, all the. He's partnered with edge connects on their india right, their india right investments and yeah, so they're, uh, one of the main co-location groups that's leading the way in india for investments in the data center space. And he said that when we're looking at this, I mean it's, it's a both and approach when we're, when we're comparing hey, are you, are you looking at speed to growth or sustainability? They're trying to balance both. They're trying to grow as quick as possible in a sustainable way.
Speaker 4:But the three points that he said is we want to look at, when we're looking at energizing these sites, we're looking at and just the power sources themselves sustainability, liability and affordability. Sustainability, liability and affordability, liability and affordability. So sustainability, liability and affordability. And so there's really, you know, there's a push to do wind and solar, which is great, but they're not always as reliable power wise, because the sun doesn't always shine and the wind doesn't always blow. So and then affordability.
Speaker 4:People are talking a lot about these nuclear sites, but if you are able to look at these nuclear projects, they are almost always 2 to 10x over budget, whatever they said they were going to be, whether it's the USS and the EU. In China they build them very cheap, but it's not as Americans would not be comfortable with the regulations that they have. So it's kind of a balance of all three of those, and I think that that was a good way to frame it, because I just think that it's a complex issue. But sustainability, liability and affordability are the three things that they're kind of navigating when they're trying to figure out what they can do from a green energizing standpoint. But Howie's done a lot of projects like this. What do you think on-?
Speaker 3:Self-generation on site. It's the way it's got to go. We're getting there, we're seeing it happen all the time and now we're less focused. We're focused on where the power site and we're talking with energy providers that can self-generate on site. It only makes sense, and I keep saying this. And Casey Mayers is great. If anybody's ever go to DCAC show with Casey Mayers is one of the best podcasts I've ever heard with him talking about self-generation on site.
Speaker 3:And look at, sorry, amy, we're promoting other channels, but it's just, it's all good. That's where we need to be and how we need to think about data center development. It doesn't make any sense to truck our power 200 miles with an extension cord that can break from a nuclear power station further away. So, and then battery storage. I don't know if anybody saw what happened out in Moss Landing in California. Uh, there wasn't just one fire in LA, which was horrible and sorry for the people there, um, and, and you know, prayers go out to those guys.
Speaker 3:But uh, in Moss Landing a? Uh, they have a large battery storage, uh containment there and the the couple of buildings that had uh battery containment in all contained in one large building caught on fire. And once a large building catches on fire with batteries, you gotta let it burn. Um so which is really interesting because the other part of the development out there they had the tesla storage that has compartmentalized self-smaller buildings that store battery storage. So you know, we're learning as we go here. Definitely don't store stuff that'll burn, that you can't put out the fire or how do you put out the fire. But anyway, a lot of interesting things going on on the renewable side and when you have a natural disaster like that, that's a problem, because there's a lot of interesting things going on on the renewable side. And when you have a natural disaster like that, that's a problem, because there's a lot of contaminants that go in the air, into the water, into the soil.
Speaker 1:Yeah, there's not a whole lot you can do in a flat, it's not good Over strawberries.
Speaker 4:Yeah, right about that, because really we would love to scale the industry in a sustainable way and we are going to do what we can, but also the way that, how quickly things are growing, it's going to have to take intermittent solutions that may be slightly less, uh, green, as some of us would want, and but I think that the industry is doing a good job of pushing the green standard, a lot better than other industries have historically.
Speaker 4:I mean, there's a lot of investment into even though data centers use a lot of power, they're contributing a lot of money to build green power as well.
Speaker 3:Not to mention not using water. Sorry, Amy.
Speaker 1:Yeah, yeah, it's a PR strategy for sure. I mean, like no one wants them in their backyard. They started suffering from an envyism and it was part of that was like they became known as the power hogs and is what it is. But, jay, when you look at a site and you're looking at, I mean, I think you always have to temper sustainability improvements with affordability. They're always, they're kind of at opposite ends with one another, right, sometimes the sustainability improvements don't make sense, don't pencil, but it's always, I'm assuming, when you're looking at a site, that's always a consideration, right?
Speaker 2:Sustainability.
Speaker 1:Yeah.
Speaker 2:Yeah, well, I think it's starting to be more of a consideration. But, you know, for us again it really goes back to the utility what they're providing we're not generating. So we don't have that really in our on our plate right now, but it's definitely something that people look at If there's a way to get solar or there's a way to get some sort of hydropower like we use in Quincy. You know, those are good things to do. So, you know, I don't think it's part of our equation right now where we're saying, oh, we've got to be able to have sustainable power here, but I think it's something that definitely shows on the list of items to think about.
Speaker 3:So it's cheaper. It's cheaper, I mean hydropower is less expensive than than any other source.
Speaker 1:That's cool. So if you were to look at two sides, like and so magically you had two sides to choose from jay and you were looking at him and there was like nobody competing and there was an offer and you could choose between one or the other and one had more sustainable components and the other one didn't, obviously would you take the more sustainable one or it. What is the low key?
Speaker 2:If it was reliable, and proven to be reliable compared to the other source, which would be your gas or coal, I think we would, yeah, definitely take a hard look at it. But you know, for data centers it's critical capacity. That means no downtime. So we can't rely on something that's not tested or proven, which means we, you know, would err to the side of guaranteed uptime.
Speaker 1:Yeah, I get you.
Speaker 3:Isn't that customer driven, though? Wouldn't you be going where the customer wanted you to go?
Speaker 2:I didn't get that in the question from Amy that there was a customer involved. I thought it was my decision maker.
Speaker 3:I thought that'd be a driver. Yeah, there's a lot of factors. Yes, if there was customer input.
Speaker 2:Yes, we would do our best to follow that requirement, for sure.
Speaker 1:All right, howie's just throwing a wrench in the mix.
Speaker 2:That's okay. Howie likes to ask me questions right in the middle of things. That's good, howie, it's good.
Speaker 3:Well, I just think it's part of the process.
Speaker 2:I totally agree and you are correct yeah, I think that's what we.
Speaker 3:We talk about a lot is a lot. Everybody's over allocating power on their data centers. Hey, we have 12 now, but we can get to 20, we can get to 30, 40, 50, and that's customer driven. It's like, hey, customer, look, if if you're going to want that, then we'll deploy that, we'll take it, we'll use it, we'll build it, uh, and that's customer driven yeah, well, then again, if that's what the customer wants for expansion, you'd have to look at the available power and what's the plan to you know provide more to that space, right, so maybe the site only gets 10 megawatts of power.
Speaker 2:You got to go back and you got to, you know, get another 10 or whatever it is.
Speaker 1:So yeah right, it's not every site you can augment with on-site power generation. Right, you have to go through hoops in order to do that.
Speaker 2:It depends. I would say it depends on the physical space that you have. If you don't have enough room for on-site generation, it's just not going to be an option.
Speaker 1:Okay, so interesting. So there's a couple of articles out. Obviously, amazon is basically taking over a small town in Ohio. I'm just kidding. They bought 600 acres. Like, do you really need that much land? Apparently they do. They need that much land to build the data center, but it's in a smaller market. And there was an article out talking about how, basically, secondary markets are basically the primary market for data centers. Yes, no, what are y'all seeing?
Speaker 2:Yes, we sort of talked about that last week when we were talking about the NFL cities and then those NFL cities kind of got saturated and then people started to look in different places and yeah, I mean, those are very attractive places, they're usually not overcrowded, they're usually more affordable, they usually have some incentives for people, you know, for data center providers, so they make sense.
Speaker 1:Yeah, so yeah, amy with that you were saying.
Speaker 4:Does it make sense for them to buy that much acreage In 2023,? Microsoft bought more land in the United States than all the co-location groups combined. Qts Vantage H5. And part of the reason for that is if they go into a market and they only buy 200 megawatts or 200 acres and they end up needing to expand the other groups are like oh well, we can sell them this at an exorbitant price because they have to be here so if they come in and they buy it at farmland prices rather than data center prices and they come in in disguise, it's a lot cheaper for them to do it that way.
Speaker 4:They can get, you know they can get 600 acres for the price of what they would spend on 100 acres in a market. You know I'm based out of dallas. In a dallas market you can buy a lot more in the middle of nowhere, and so they they end up opting for that, even if they don't end up using it all. Um, but we see that they don't want to be out leveraged in the future for them to, because you know, there's times in northern virginia people are buying sites for uh.
Speaker 4:We saw, I saw an increase in from a piece of land that was bought in 2021 and then sold uh in 2023. Two years later, it was 23 months later and it was sold for 11X times what it was in 2021, because the data center group had to expand and it wasn't that many acres, it was less than 50 acres, but it was right next to another site that they had to expand on. And so if you have the, if you can control the land, like how we said when we were mentioning the federal government side. They want to control the land, uh, rather than have an obligation to pay somebody. If they're going to put that much infrastructure on there and billions of dollars worth of assets, they don't want to have to move it again yeah, I can't tell me times.
Speaker 3:We've made offers and they see data center attached to anybody's name and the price doubles. You're like God. No, that's horrible.
Speaker 1:I know for sure. Yeah, Y'all have to like reach out and stealth.
Speaker 3:We don't price by the square foot anymore or by the acre. We price by the KW or by the megawatt.
Speaker 1:Actually that's true. That's true, but will that change? If there's going to be on-site power generation, it's going to be right. I mean, it's not going to matter okay, natural gas.
Speaker 3:If you need it, you need it.
Speaker 4:You need a fuel source, so maybe that it's going to change a little bit yeah, yeah, interesting yeah these groups are racing in ai, and so it's all about time to yeah, time to deployment, and so, whether that's on-site generation or being the site that's next to a substation, uh, or next to current data centers, and you know that there's more power to be had, that's, that's what's valuable, and if they're if oracle, google, aws and Microsoft and Meta are all racing in their AI platforms, then they feel like, if they're the first ones to general AI, then they're going to win, and that the money that they spent if they spent a little extra on land 10 million extra dollars on land it's nothing compared to what they are going to make on the backend, and so that's how they're viewing it, and so that's how we are trying to uh, we're trying to understand what their patterns are, and then we can it's been such a shift.
Speaker 3:Yeah, amy, from in 2018, we were, like you know, gingerly going along, going, okay, is there a natural disaster here? And maybe there's power, maybe there's water and we should. We go here. Now we're building in metas, building louisiana, we got google in mississippi. It's like and natural disasters, whatever, you know, to some point you know, it's a hard time to get people to go to florida, for hyperscalers to go to florida, or go to houston. They're they're hesitant to get in the where there's um hurricanes. But yeah, I can't think of a data center that's been affected. Maybe I that I've heard of that's been affected by a hurricane, or well we have data centers that float, that are on.
Speaker 1:There's a company that actually makes you know, nautilus, who makes data center floats well, if you think about it, abilene at the top of the, you know the show. Abilene is in tornado alley and there's tornadoes, oh is it abilene? Really yeah it's in tornado alley, so all the time oh, you made a great.
Speaker 2:You made a great point. It it is a major shift. I mean, if you look back in 2015,. People were saying, oh no, we need to be in the middle of the country where there's no rain, no hurricanes, no, anything. They wanted to be somewhere. They've thrown that all to the wind now and said hey, you know what, as long as there's power and there's a place for us to build, let's go there, let's get it done. And you know, that just strengthens the argument of the demand in the market.
Speaker 2:So, it is what it is.
Speaker 1:They're going to build a tornado alley or a hurricane, they're just going to build. Apparently they have enough money so they can build basically a fortress and it's not going to blow over. I guess that's what they're thinking.
Speaker 3:I mean, you can you can build stuff well to survive her yeah, yeah, there's, they're robust, building their, their hurricane or tornado, you know, proof up to a certain level, or yeah, yeah, so they're just going to build them just to make sure that it doesn't get down.
Speaker 1:I'm, I'm surprised. So there's two more drivers these, these stories that came out. I love when people go to Davos, because they're all like they pull out their crystal balls and then they talk about all the things that they wanna do. And our president got elected, so he's trying to. Davos is trying to steal his thunder and so he is not a fan, but anyway.
Speaker 1:But Larry Fink is with BlackRock and this has more impacts on data centers than we think. But he's trying to get the SEC to push for the stocks and bonds, to tokenize them, which basically means they're going to be on the blockchain. So we have trades now, but you have trades, but this will make it super complex. I mean, it's obviously more it's on a ledger and it's fine, but it's going to change the whole trading platforms. He wants them to push them to the blockchain and I'm like, ok, you go, dude, that's fine. I just think that three X's, that three X's to four X's, the need for data and data centers, if you, if they do that. That's just what I think, but I can be wrong.
Speaker 4:Yeah, that's really interesting. And you know he he does have as much power as about anybody in.
Speaker 1:I think they're all trying to, you know like, oh, I'm the president's best dude, you know, I don't know, yeah, so it'll be interesting.
Speaker 4:Uh, I mean larry fink and blackrock have been. They were the major uh legs behind the kind of esg scores within these companies, and so we'll see what uh, what they, what influence that has. I mean, similar to some of the other things, I think that adoption will take a little while if that is really the way that we move, but that would be really interesting.
Speaker 1:Um, I mean, as soon as you bring it to stocks and bonds, then it goes to real estate and then it goes to regular banking, and that I mean. I mean this whole thing is tied to this whole future of crypto, right. Like what are we going to do with crypto and how that's going to be evolving, right? Obviously, trump is a very crypto friendly guy, so I think that's interesting too.
Speaker 4:He just made more off his crypto coin than he ever did in real estate.
Speaker 1:The meme coin. I swear I don't get it. I don't understand meme coins. I mean I'm like I don't get it. I don't get it, but who knows, I think it's still a little interesting.
Speaker 4:I personally avoid it, but I would. I don't know. It's each their own. I'm with you Steven.
Speaker 1:Yeah, for sure. I think we all should start our own coins. Would the Amy coin sell? I don't know. Maybe you think so, oh't know, maybe you think so.
Speaker 3:Oh yeah, I think so. Yeah, didn't that huck two girl get busted for something kind of coins.
Speaker 4:She started uh, if you do it wrong, like if you do it wrong.
Speaker 3:Yeah, some guys used her I don't know for publicity.
Speaker 1:Yeah, oh who. What are you talking about? I missed that, never mind.
Speaker 3:Never mind, it's a guy thing it may not be appropriate for this venue.
Speaker 4:Sorry, People can get sued for pumping strategies on meme coins he was talking about a different meme coin, but if you just elevate, this.
Speaker 3:It was a pump and dump.
Speaker 4:Yes, you can get sued for Manipulation.
Speaker 1:Isn't that what they're claiming that Trump and that meme coin did? Because a lot of people lost a lot of money that bought it right.
Speaker 4:It's only been out for about a week.
Speaker 1:I know, and it's like we did this thing right. Well, that's what they all do. They all just bounce up and down.
Speaker 2:So it's kind of hard to.
Speaker 4:I don't know. I'm going to avoid it.
Speaker 3:We got too many other things to do right now.
Speaker 1:Yeah, no for sure. But if crypto does become popular, obviously they're taking power too, right. So we're like, if there are people are crypto mining different coins, right, and then we're going to have, you know, less power out there. Now I don't know. There was a conversation that they were talking about how there's this data center analyst. I love when the data center analysts come on. I'm almost as jaded as y'all. I'm saying that. I talk with y'all enough now that I'm starting to get really jaded when people come on and start talking about data centers and they don't know what the hell they're talking about. And I'm sitting there and this guy's on CNBC and he's like blah, blah, blah and I was like that is not what are you saying? And I think I, I, I'm I remember being.
Speaker 3:I remember being at an event and somebody talking about these how to turn office buildings into data centers and and the stuff they were saying I was going. Where did you get that information? Like that's, there's a huge circle of people around her at this event talking about I'm like she goes. I just read about it.
Speaker 1:Yeah, exactly.
Speaker 3:It's complicated. It's it's complicated for us Even. Sometimes we're going like how, how is this happening? But in the data center, industry is so secretive it's hard to get information.
Speaker 1:Yeah, no, no, no, that's true. So they were generally talking about how because crypto, obviously that's technically a data center, right. They're computing and they're mining, crypto miners they're technically data centers, right. And so his big thing was we were talking about this. I don't know how we, like six months ago or whatever, where there were people were trying to find where those crypto, those mining locations were, because they had power, they had available power there, and so if there was not going to be any mining happening, maybe we could turn that into a data center, right. That was like the big thing. Well, that was like the newest story coming out. That's what they were talking about.
Speaker 3:I was like dude, that's like so old, that's like yesterday, that's like last year, that looks like so last year well, it's interesting, amy, because a lot of the crypto guys are hiding like you could, they could be literally hiding in the middle of a solar field. Yeah, they're. They're part of another, a power generation area, and ben the. The other problem with the crypto uh miners is they might have a power agreement with utility company, but they also have load shedding agreements that the utility company says hey guys, we need all this power, we're shutting you down when we want to or we need to use it somewhere else, and that doesn't work for a data center. That's a problem, yeah.
Speaker 4:Yeah, I know. So All about that about. He was just talking about the critical infrastructure and mission critical, and so he knows the differences of those workloads.
Speaker 2:Yeah, I just lost my train of thought on what howie was saying. Though, howie um, would you, will you repeat what?
Speaker 3:I'm saying about the crypto load shedding of power and crypto miners in in sitting in the middle of solar fields. Um, they're just random places, because we had groups asking us to locate publicly traded crypto mining uh sites and you're like god, good luck. They're so hidden they are hidden.
Speaker 2:And the other thing that's happening is utilities. If they know that there are crypto miners in your facility, they'll hit you with other fees. So you know, providers don't want those fees to come from the, from utilities, and if they hit you with those fees, sometimes they'll make them permanent if they if they think they can. So you have to. You really have to be careful with that and not you know, and and ensure that if you're trying to stay away from crypto, you do so. So it really depends. There are some, there are some data centers that are specifically built for crypto. I mean, elon built one right, the yeah, and he had for a long time and I think it was texas or someplace like that, but, um, you know that just chugged along taking power all the time. It really didn't do much, but use power.
Speaker 4:Yes, and people see more of the public good for data centers because they like using the internet, they like doing all the things on their phone, but with crypto stuff they public utilities, public officials. They do not prefer that at all and any of the sites that we have. It's a lot easier to get power to your site if your end user is confirmed to be a data center company rather than a crypto mining company. Yes, correct.
Speaker 3:Hey, I want to change the subject a little bit and I wanted to bring up one last thing while we're finishing up on here, and something I was talking to Stephen earlier about, and a big takeaway from PTC. Stephen, can you share what you learned, one of the biggest takeaways that you got from PTC?
Speaker 4:Absolutely so when we were. There's a lot of great sessions, but one of them, I believe it, was the head of operation. She was the head of operations for NVIDIA's AI, super compute, super computing, and so she's they're really trying to figure out what AI is looking like going forward and you know some of the next steps are around physical artificial intelligence. They you know they were talking about, uh, in the future, them having bees like artificial intelligence, bees that spread Paul in the way the bees do and like, act like bees so that the other bees don't um attack them or whatever.
Speaker 4:And so they talked about artificial intelligence. They talked about gene mapping and just understanding health. They talked about what a huge disruptor it will be in the healthcare industry, the insurance industry, if you're able to find, hey, who can give you the solutions the quickest for your health problems. Would you even be seeing doctors the way that you do now, or would you outsource all that to places all over the world and artificial intelligence connecting you with a doctor in Pakistan or a doctor in Japan and you working with them, instead of through your current healthcare system where you're overcharged and kind of billed by everybody who it goes through? There's just ways that, unless you have to be treated physically, that that's going to change, and they just had all these very interesting market interrupter or market changing ideas in different ways that this will be different over time, and so I think that we're just kind of scratching the surface. The previous 18 months was about 10x.
Speaker 4:what, uh, as far as what ai has learned then from the 18 months before from when they got started and had gotten going, and so he just thinks it's going to continue to grow in, uh, the same sense and uh, I think that once we're seeing physical ai stuff come into play, it's going to be it's going to be very different. I don't know if we're there yet, but it was just interesting to hear all the theories on where artificial intelligence is going and what areas can be affected by it.
Speaker 2:There's an AI dog collar that allows you to understand what your dog is telling you.
Speaker 4:I don't want to know.
Speaker 2:Yes, there is, there is an.
Speaker 4:AI dog collar.
Speaker 3:I don't want to know. Yes, there is. There is a dog. I don't know what he's saying. That's like the movie.
Speaker 1:Up where it had it run and it talked to you.
Speaker 3:Oh, interesting, hi, my name's Doug, correct, I do have, that.
Speaker 2:So they're saying we'll be able to talk to whales, we'll be able to talk to the animals, we'll all become Talk to the animals, we'll all become Dr Seuss, dr Seuss, dr Seuss.
Speaker 3:That's it, sorry, thank you.
Speaker 1:Interesting, that's super cool. I mean, yeah, so they're talking about physical AI. I'm assuming they mean robots, right, or where are?
Speaker 4:robots yes, robots, but also I mean they were talking about about how I mean there's lots of use cases for this in one of the professors was from Japan who was talking and he said that because of their population issues, that they're going to be able to. It's not taking away jobs, but it's enabling the people who are going to be, who are there, and the less population to still do as much or more with less people. And it's not about I mean it's similar to maybe email and stuff like it didn't it took away certain jobs, but it enables so many more jobs to happen, and so it's really not as doom and gloom as we can make it in some of the movies and stuff, but it's like any technology, it could be used for good, it could be used for bad, but we want to stay optimistic and try to help the good solutions come through.
Speaker 3:I think it's one of the greatest inventions we've had, but it's going to be the biggest disruptor we've ever had in our lives, because it's going to be. People are going to have to adopt change and it's going to become everybody's, going to be a function of their life and any in something they do.
Speaker 1:So yeah, for sure, and I think nobody knows what it is. I mean obviously early days and nobody really kind of knows where it's sitting. But I mean we're deploying AI agents now and it's sick, that's cool.
Speaker 1:It's sick and honestly I can code Like I would never be able to code before. I've never coded. I took a coding class I'm going to show how old I am at Purdue and way back in the day and I just I died in the class. I barely passed right and I never coded after that. But I can code now because it's like modular and you're just like I wanted to do this and I wanted to do that and you just tell it what you wanted to do and it goes. And it's sick how cool it is. I mean there's a little more depending on the automations and the agents you want to make, like if you use make or use n8n or use different ones. That kind of help it, but still, what's an ai agent?
Speaker 3:is it something the federal government like the fbi, cia? What's an agent that's?
Speaker 1:a really bad name, by the way. They should have come up with a different name. We're calling them AI employees, basically.
Speaker 3:Employees yeah.
Speaker 1:AI teams. So we're calling them teams because, you think about it, it's what you would give a person to do. You would actually deploy five different AI employees to do, because you want to have guardrails, right, so you want to have them to do certain tasks and that's all they do. They just one part of the task and then they complete that task, right. That helps kind of make sure they don't hallucinate and go crazy town and do crazy things, right. But the agents or employees or whatever you want to call them bots some people call them bots, but it's not a bot, because it actually is performing tasks and-.
Speaker 1:Like a personal assistant, but it's not a bot, because it actually is performing tasks and and like a personal assistant. Yeah, some of those right, um, some of them are crm based, some of them are, uh, for us. They're like estimation, we can do estimating, you can do um, project management, you can do, uh, all sorts of different things with with them, right, and?
Speaker 1:And so it's early days, but no joke. I was talking to my development team that was helping us build out these agents. They call them agents, but he's like Amy, he goes in a year. This is everybody's gonna be using these.
Speaker 1:He goes wait, it's just, it's a year he goes. It's moving so fast because AI is enabling so many people to get in that everybody will have an agent deployed on some somewhere on their computer screen helping them do a bunch of different things. Right, yeah? So this time next year mark my words everybody on this call will be using agents all the time and you're probably already using AI. I don't even know it, because every Google search now uses AI. Every time you pick up your phone, you're using AI. Every time you open your refrigerator door, you're probably using AI. It's interesting.
Speaker 4:Refrigerator. I need to get your fridge.
Speaker 1:I know. Not my fridge. That was like a collective you, not my fridge.
Speaker 3:My fridge is old, gotcha, gotcha, gotcha. My fridge is old. Well, I've done that. I've done that. Where I did this thing, it tells me what foods I should eat or not eat. And I dumped it into AI and give me a five-day menu breakfast, lunch and dinner with these ingredients. And it's like one point, not even a second.
Speaker 1:Boom, not even a second boom here, and a grocery list like come on, that's insane. It's amazing what ai can do and but I think we're just. But if you talk to like like we're kind of leading edge because we're techie, right, and all this other stuff, we're probably the first adopters to use ai and I know, I know open ai has a lot of users.
Speaker 1:I think it's the same 20 people. Is she using it over and over? No, I'm just kidding, but you talk to like normal people. They're not using AI. They might use it to do a Google search Are?
Speaker 3:we not normal.
Speaker 1:We're not normal, we're kind of cutting edge a little.
Speaker 4:There are younger, so I help with students at my church and I know for sure that a lot of them are starting to use AI to help write papers or get them started on. I mean, maybe they just turn it in what it says, why wouldn't you?
Speaker 1:Yes, no.
Speaker 4:In my master's program.
Speaker 1:They're saying use it. I'm in a master's program right now and one of my professors is like use it, use chat gpt. That's what it's there for. We're in a technology commercialization degree. Why aren't you using all the tech available?
Speaker 4:too, right that's cool. Oh yeah, the adoption, it'll happen generationally as well as yeah, also as it comes in. But um, yeah, we're gonna see.
Speaker 3:We're gonna see a lot of maybe grandpa won't get it as quick, but it'll happen, no the ai team yeah, I think the aipc like what, what uh, what uh, jensen yeah
Speaker 1:spes was showing us the aipc. I think that brings all the people who've been cut off by technology back to us. Right? I don't have to be my 82-year-old dad's tech support anymore, right, he can just talk to his computer and tell his computer what he wants to do, and then they can have arguments. I don't want to have an argument with my 82-year-old dad. Dad, do you see the clip thing? That's how you attach to an email, like, I don't have to do this a hundred times. I'm just so excited Over and over and over. All right, last story and we're almost out of here and this has been so much fun. Just predictions on the China-US AI war. What do we think? Because you know there's people talking about it and we don't like China already, but they're kind of. You know you can't ignore it.
Speaker 2:It's so hard to believe anything, in my opinion, that that comes, you know, from there to that you can't put a whole lot of weight in it. But if there's some way that they can prove that, that you know they've somehow stepped ahead of AI in america, well, all the power to them.
Speaker 1:I think it's so new that anything that's happening right now just makes it, you know, either either better or something that doesn't need to be part of the part of the equation yeah, yeah, I gotcha I mean, and maybe that's why the infrastructure, the focus on the infrastructure, is the case, because you're going to, you're not going to be able to develop AI as much if you don't have the infrastructure in place. Right? Maybe the thought behind it? And they don't have the infrastructure we do Not even close.
Speaker 4:Yeah, absolutely not was about nine months ago that 90% of the 85 to 90% of the artificial intelligence deployments were in the United States, so not even Canada, and part of that was because we're building so quickly that EU couldn't really keep up.
Speaker 4:And then there are certain regulations around certain servers getting to spots in APAC, and so they really still the majority of artificial intelligence investment has stayed in the US, and both administrations are very keen on that still being the case, and so, uh, I would say that the race is being won by the United States so far, but we do know that there is lots of uh, maybe, uh, copycat or patent infringements that happen all the time in APAC. Uh and to U, and so I would say that there will be something catching up. I think that as long as we keep things I think we need to keep a close eye on things I think that any government having too much say over artificial intelligence and too much control over it could be catastrophic for us long term, whether it's our government or theirs. But I would say that the in general we are, as long as it's a free market thing, I think that we're still in far, far and ahead, far and away ahead.
Speaker 1:I like how he tap dances. He did so good, Steve. You did so good you were tapping.
Speaker 3:I can do that I can do that.
Speaker 4:I learned from Howie.
Speaker 3:Yeah, I can do that. Here's my response Make America great.
Speaker 1:Let's talk about. Let's talk about and not talk about my China prediction.
Speaker 1:It's your China prediction. I mean, you know, if we talk about the man, mr Trump, he did. It was on the World Economic Forum today and he did say oh, by the way, if you're going to make something, you better make it in America, otherwise I'm going to tariff it. And I was just I was floored. It and I was just I was floored, and part of it was because when we sell goods anywhere else, like the U S exports anywhere else, it's tariffed. If even in the EU they tax it, right, um, so I think he's just trying to be fair, but it's going to be interesting to see what happens with this whole tariff thing. Uh, you know, I don't know, sometimes he blows hot air and sometimes he means it, and I don't think anybody knows when he's doing one or the other. So he's like a wild card. So I guess they have to believe him, right, I don't know?
Speaker 3:Yeah take chances. I think those are credible threats.
Speaker 4:I don't think it'll be just a uh, just a flat out uh tariff that's equal for everybody. I think there's a way that it will happen, based on which countries and which partners that we have, but I think that there will be tariffs implemented in the near future.
Speaker 1:Yeah, and, and I. Which is, I guess, okay for the data center industry in the U S, right, I mean. Which is, I guess, ok for the data center industry in the US, right, I mean, I mean, I don't think that impacts the tariff, or does it? Am I missing something?
Speaker 4:Does it? Do the tariffs impact the data center industry at all? Not as much nearly as other industries, and but I mean it's better for the taxpayers for us not to, for us to pay less taxes. I mean there's there's models where they can eliminate income tax if they implement tariffs correctly. So we'll see what. We'll see what happens.
Speaker 1:Yeah, I don't think that's happening, buddy.
Speaker 4:Nice try Well once you yeah, once you give up power to the government, they, they, don't really love to give it back. So I doubt. I doubt we're going to actually eliminate income tax, but there's models where they could.
Speaker 1:Huh, interesting. I haven to actually eliminate income tax, but there's models where they could. Huh interesting. I haven't seen that model, but that's interesting. I haven't seen that at all, but you know.
Speaker 2:But that's getting that agent.
Speaker 1:Yeah, exactly, I got to make an ai agent for that to determine economic policy. What am I waiting on? I mean like, seriously, and that's what they should be using. They should be using ai to help run the government. Well, this has been super fun, y'all we're here, we're at our hour and this has been another week of Data Center News, so thanks y'all for coming Parting information. If somebody really wants to get a hold of you, how could they do that? Go ahead.
Speaker 4:Stephen. Well, I work with howie stephen dot schlenker at avisonyoungcom. Amy jay, thanks for letting me join today and uh, sorry if I talk too much, but I a lot of interesting stuff happening and I actually got to talk to some of jay's uh counterparts at h5 when I was out at ptc. I have their their great hat right here there I got. I got some merch from different people at different things, but it's got the H5 logo, so they've got. There was a lot of I want merch.
Speaker 1:Jay, Can you send me some merch?
Speaker 2:I want some merch, of course, of course I'll send you some stuff.
Speaker 1:Awesome Getting merch. All right, Jay, your turn.
Speaker 2:So I can be reached at jayhus, as in Sam s, as in Sam ey, at h5datacenterscom. If you want to reach me by phone, feel free to call me at 415-933-6244. And I'm very happy to be on the show here, Really really looking forward to next week. And Howie, Amy, good to see you and Stephen, very nice to meet you.
Speaker 1:Yeah, very cool, and Mr Howie.
Speaker 3:Yes, you can email me at Howard Berry At avisonyoungcom. That's Howard B-E-R-R-Y Avisonyoungcom. You can also Google Avison Young Data Center and we pop up. We've got a team here growing. We just had a new team member out of Nashville. So we are growing. We're four brokers strong now and loving the business. We've got a lot to do.
Speaker 1:That's so cool, and the only other plug I would make is I'm Amy Palvado. I'm the chair of the US PropTech Council. We have out now a data center sustainability survey. So if you are in the data center industry, we'd love to get your thoughts on that. So that'll be on our website. So everybody go in there and fill it out. That would be great and see y'all next week on our LinkedIn.
Speaker 3:That's great, amy. Thanks Amy okay. Jay is out.
Speaker 1:Jay is out are we.
