Atlanta Tops the Nation for 2024 Data Center Absorption

Atlanta overtook Northern Virginia for the first time in data center absorption last year, a seismic shift in North America’s data center markets, per Commercial Search.

By The Numbers

According to CBRE’s North American Data Center Trends report, Atlanta recorded a stunning 705.8 megawatts (MW) of positive net absorption in 2024, nearly 39 times the absorption rate seen in 2023

This surge in demand was primarily driven by the rise of GPU-as-a-Service (GPUaaS), a cloud-based service that provides on-demand access to high-performance graphics processing units (GPUs). 

These services are attracting substantial leasing activity, particularly from tech companies looking to host their infrastructure in colocation data centers—facilities where businesses rent space to house their own servers and storage equipment.

Atlanta Data Center Boom

The numbers behind Atlanta’s rise are staggering. The city’s data center inventory grew by 222% last year, reaching over 1K MW, as the demand for data storage and processing space soared.

In 2H24, the under-construction total surged by 195%, with 2.16K MW of data center space underway, topping all other North American markets in terms of growth.

Notable area investments include AWS (AMZN), which is planning an $11B investment in new data center developments. Additionally, Lincoln Property Co. is redeveloping a 30 MW colocation facility in DXC’s former data center, underscoring Atlanta’s expanding role as a key player in the space.

Energy, Land, And Tax Incentives

Available, affordable, and abundant energy is a key factor fueling Atlanta’s success. The region has a reliable power supply, with Georgia Power/Southern Co. recently bringing Vogtle reactors online, providing approximately 4GW of power capacity. 

This recent glow-up, combined with the state’s tax incentives designed to attract high-paying tech jobs, has made Georgia a prime location for data centers.

Ryan Mallory, COO of Flexential, refers to Atlanta as the emerging “data center alley” due to the area’s land availability, power infrastructure, and supportive local policies. This has made the city a key destination for hyperscale and colocation providers.

Broader Data Center Landscape

While Georgia benefits from the growing interest of tech companies and data center investors, other Southern states, like Texas, have also seen significant industrial growth.

According to Mallory, Texas cities are experiencing similar data center expansions due to their reliable power, favorable tax environment, and access to a skilled workforce.

Overall, North America’s data center market is experiencing record expansion. In 2024, the amount of data center space under construction in North America reached 6.35K MW, a 12-fold increase from 2020.

This reflects a surge in demand driven by AI, which accounted for about 15% of data center workloads in 2024—and is expected to grow much more by 2030.

Meeting Power Demands

Despite the rapid growth, power availability remains a critical challenge. Many data center developers are considering self-generation options to complement traditional grid power, with natural gas emerging as a preferred solution due to its affordability, abundance, and faster deployment than renewable sources like solar and wind.

Moreover, average wait times for grid connections have extended to four years in many markets, which is pushing development further into regions with abundant power sources but fewer established data center ecosystems.

Zooming Out

As demand for data center space shows no signs of slowing, regions like Atlanta and Georgia are well-positioned to remain central hubs in the US data center market.

Meanwhile, AI will continue to be a major driver of future data center expansions. And as AI models evolve and the need for computational power grows, data centers capable of handling modern workloads will be invaluable.

In fact, by 2030, AI is predicted to account for as much as 40% of total data center workloads.