Construction has already started on the Stargate AI data center in Abilene, Texas. This project shines light on a big tech-savvy trio partnership behind the scenes between OpenAI, Oracle and SoftBank. It creates a collaborative federal, state, industry, and academic public infrastructure development project for AI across the United States. Former President Donald Trump has given his endorsement to the Stargate initiative. This support highlights the initiative’s importance and real world applicability, especially in the rapidly evolving world of data and technology.
Need for data centers has boomed in recent years, particularly during the pandemic. This increase is primarily driven by the growing demands of AI workloads. These workloads require massive amounts of computing power, but the electrical, cooling, and networking infrastructure to support them. The world is moving away from physical real estate toward these more “invisible” assets, say industry experts. Spaces like Stargate are at the forefront of this new commercial real estate frontier.
The building of hyperscale facilities such as Stargate does not come cheap. Constructing a facility like this usually involves an up-front investment of about $12 million per megawatt. Today’s modern hyperscale data centers average a range of 150 to 300 megawatts. AI-focused facilities over 1 gigawatt capacity often need investments in the range of multiple billions. This financial commitment highlights just how quickly real estate investments in the tech sector are changing and growing.
Even more encouraging, recent surveys show that 95% of big investors around the world are looking to boost their data center investments. Moreover, 41% of these investors expect to deploy $500 million or more in equity to the sector in the next year (2025). This trend presents another historic shift in the commercial real estate industry. Global investment in this sector is projected to increase 8% from last year.
Kishore Moorjani, an expert on real estate trends, noted the major disruption taking place in the industry. He stated, “The world of real estate is changing from what I’d call the ‘visible’ to the ‘invisible.’ Everything we can’t see but we use: the cloud, as we like calling it, lives in the data center.”
Equally as important is the measured impact that this shift has had on financial institutions, noted Stuart Crow. “A big part of that is data centers, and now battery storage and infrastructure that’s associated with that,” Crow explained. He sounded some alarms about the state of capital available for these projects. He raised the issue of whether there’s sufficient investment to meet the increasing demand.
“So the biggest question mark for the real estate community is: is there enough capital at the moment?” – Stuart Crow
The attractiveness of investing in data centers is hard to resist, even in the face of these challenges. Banks encounter challenges dealing with their risk exposure from these projects. Moorjani said that institutions are being stretched thin by both the sheer number and expense of constructing new capacity.
“Banks are certainly challenged around their data center exposures, given the sheer volume and quantum of the build that’s going on,” – Kishore Moorjani
Stakeholders are still actively figuring their way through this rapidly changing emerging market. The Stargate AI data center is a bright spot of innovation across our rapidly digitizing economy. The move toward invisible assets is a new paradigm for investment strategy. More fundamentally, it signals a broader transformation in how society as a whole engages with technology and infrastructure.