Data centers on what was recently farmland in Aldie, VA. (Jahi Chikwendiu/The Washington Post via Getty Images)

Companies are so desperate for data centers they're leasing them before they’re even built

5/16/24 8:46AM

Data center construction levels are at an all-time high. And more than ever, companies that need them have already called dibs.

In the first quarter of 2024, what amounts to about half of the existing supply of data center megawattage in the US is under construction, according to real estate services firm CBRE. And 84% of that is already leased. Typically that rate had been about 50% the last few years — already notably higher than other real estate classes.

“I’m astonished and impressed by the demand for facilities yet to be fully constructed,” CBRE Data Center Research Director Gordon Dolven told Sherwood.

That advanced interest means that despite the huge amount of construction, there’s still going to be a shortage of data centers to meet demand. In other words, data center vacancy rates are staying low and rents high.

Nationwide the vacancy rates are near record lows of 3.7% and average asking rent for data centers was up 19% year over year, according to CBRE. It was up 42% in Northern Virginia, where many data centers are located. These sorts of price jumps are “unprecedented” compared with other types of real estate. For comparison, rents for industrial and logistics real estate, another hot asset class used in e-commerce, is expected to go up 8% this year.

As such, data center REITs like Digital Realty, Equinix, and Iron Mountain have been performing really well.

The backlog of demand isn’t going away anytime soon. It takes a really long time to build data centers because it doesn’t just require building data centers. Data centers need updated power grids, fiber lines, and water to come online, and often those connections have to be built as well. And those are subject to supply chains, permitting, easements, and other roadblocks.

As Dolven put it, “Instead of a dirt road, they need 6-lane highways.”

Getting all that squared away adds an additional 1-3 years at least on top of 1-3 years it already takes to build the typical data center, Dolven said.

And our need for data centers and the infrastructure they rely on is only going up. Not only are the applications we use daily collecting, generating and parsing tons tons of data, but the rise of generative AI is going to turbo charge these needs even more.

As my colleague Matt Phillips pointed out, data centers were already sucking up vast amounts of power before the AI boom. Indeed, data center electricity demands are running up against power companies’ ability to generate it.

Jon Keegan7h

Meta will begin using your AI chats to target you with ads

When Meta rolls out a new product, the company usually waits until that product has a billion users before turning on the ads.

In May, Meta announced that Meta AI has crossed that threshold, saying that more than 1 billion people are using the product every month. Today, Meta announced that it will begin using your conversations and messages with Meta AI to personalize your recommendations and the ads you see.

Meta currently monetizes your activity on Meta platforms using your interactions (likes, shares, attention) to tailor your exposure to Meta’s massive advertising machine. So if you asked Meta AI about travel tips for your upcoming vacation, you might now see more content and ads related to that place. But what if you’re asking Meta AI about how to deal with your depression?

In a blog post, the company shared:

“When people have conversations with Meta AI about topics such as their religious views, sexual orientation, political views, health, racial or ethnic origin, philosophical beliefs, or trade union membership, as always, we don’t use those topics to show them ads.”

But Meta has a spotty record when it comes to protecting sensitive personal information from leaking into its ad platform. Meta’s pixel-tracking technology has been found to pick up sensitive information regarding mental heath crises, financial information, and medical information.

Meta says you can manage the ads you see via controls in its privacy settings, but it’s unclear if users can opt out of the use of Meta AI conversations and interactions for ads and recommendations altogether.

The company said users will start to see notifications about the changes this month, which will go into effect on December 16, 2025.

Meta did not immediately respond to a request for comment.

Improving Your Recommendations on Our Apps With AI at Meta

In a blog post, the company shared:

“When people have conversations with Meta AI about topics such as their religious views, sexual orientation, political views, health, racial or ethnic origin, philosophical beliefs, or trade union membership, as always, we don’t use those topics to show them ads.”

The company said users will start to see notifications about the changes this month, which will go into effect on December 16, 2025.

Meta did not immediately respond to a request for comment.

Rani Molla8h

Tesla sales grow in some European countries for the first time this year

In September, Tesla sales rose in France and Denmark for the first time this year, while they also continued to grow in Norway and Spain, according to early European sales data reported by Reuters.

That’s a notable shift from the declines of previous months, as Tesla benefits from the rollout of its revamped Model Y and the introduction of numerous incentives across the continent, helping to stabilize its earlier sales slump.

Of course, Tesla’s European sales fluctuate dramatically month to month in Europe in part because the company doesn’t sell that many vehicles in Europe. Typically Tesla sells a few thousand vehicles per month per European country. In comparison, the automaker sells tens of thousands of cars in the US each month.

Tesla is up more than 2% in early trading, after having just capped off its best month since the election.

Rising ambitions and skyrocketing costs: Here’s what we know about Project Stargate

As the number of gigawatts and GPUs grows, so do the questions about how the massive data center project will be paid for.

Jon Keegan8h

Rani Molla9h

Apple reiterates plans to “partner with other generative AI chatbots” besides ChatGPT

Apple is playing the field with AI and it wants you to know.

In a filing to dismiss Tesla CEO Elon Musk’s lawsuit accusing the iPhone maker of favoring its partner OpenAI’s ChatGPT on the App Store, Apple said that can’t be the case because it is “widely known that Apple intends to partner with other generative AI chatbots.”

At its developer conference last year, Senior Vice President of Software Engineering Craig Federighi previously mentioned that Apple “intends to add support for other AI models in the future.”

Apple currently has a partnership with ChatGPT where users can direct their Siri queries to go through the chatbot. Apple, whose AI strategy has lagged its peers, has also been in talks with Anthropic and Google, and is reportedly considering using Gemini to power Siri.

Apple’s lawyers refuted X Corp.’s claims that Apple cannot partner with OpenAI “without simultaneously partnering with every other generative AI chatbot — regardless of quality, privacy or safety considerations, technical feasibility, stage of development, or commercial terms.” Apple’s legal team added, “Of course, the antitrust laws do not require that.”

Apple has yet to announce who its future AI partners will be.

Apple Denies Harming Musk’s xAI by Teaming Up With OpenAI

At its developer conference last year, Senior Vice President of Software Engineering Craig Federighi previously mentioned that Apple “intends to add support for other AI models in the future.”

Apple has yet to announce who its future AI partners will be.

Rani Molla9/30/25

Meta buys chip startup Rivos in effort to lower its reliance on Nvidia

Meta is buying AI chip startup Rivos for an unknown sum, as part of the social media company’s effort to decrease its reliance on graphics processing units from Nvidia, Bloomberg reports. Rivos was seeking funding in August at a $2 billion valuation. Meta has been spending exorbitant sums in an attempt to create AI models that are smarter than humans, an effort that’s involved investing in developing its own AI chips.