We've spoken before about how much electricity is going to be demanded by data centers in the future. According to this study, data center energy usage is expected to represent somewhere between 6.7-12% of total electricity consumption in the US by 2028. And according to McKinsey, demand for data centers is going to at least 4x by the end of this decade. So the consensus is that we are going to need more, not less, data centers in the foreseeable future.
But if data centers represent the physical infrastructure needed for our digital activities, it's both interesting and valuable to think about where this stuff wants to go, especially since tech is, in some ways, a decentralizing force for cities. Interestingly enough, they exhibit the same economies of agglomeration as many other urban activities in that they want to be near density and other data centers. Maybe even more so.
Here's an excerpt from a Harvard Business School report (2022) called "Where the Cloud Rests: The Location Strategies of Data Centers."
The study finds a pervasive urban bias in the location of third-party data centers. For example, we find that all large metropolitan areas with over 700,000 population have at least one supplier. Less dense areas may or may not have any. Moreover, local entry rises with the presence of local information industries and intensive data users, such as finance, insurance, and real estate. Because less supply locates in the areas with lower density, a high fraction of buyers in small and medium-sized locations must get their services from non-local suppliers—likely located in the closest major city. Relatedly, we also find supply of more specialty services in denser and more competitive locations. We interpret all these patterns as the result of tension between economies of scale and user preference for proximity.
And here's a quote from LA-based Rising Realty Partners:
Once a data center hub is entrenched, it tends to create its own gravitational pull. Data center tenants want to be near other data center tenants. And the main hubs also boast high levels of connectivity. The calculus is straightforward: It’s far easier to run a fiber optic cable across the street or across town than to run a connection across the state or country.
This is what is happening in Northern Virginia with "Data Center Alley" and what is now now referred to as the world's largest data center hub. As of July 2024, Loudoun County, VA (which is located just 34 miles from Washington, DC) had 43 million square feet of existing data centers and ~47 million more square feet in the pipeline. This represents an increase of ~60 million square feet compared to where the area was as recently as 2022.
Overall, there are only so many "primary" data center markets in the US. CBRE lists 8. This makes it a relatively concentrated real estate asset class in terms of geography.
Cover photo by Claudio Schwarz on Unsplash
I have long been interested in the work of entrepreneur Dennis Crowley. He is perhaps best known as the co-founder of Foursquare, which popularized location "check-ins." But he's created a bunch of other stuff too. The common theme is that his products exist at the intersection of tech and cities (the physical world), which is probably why I've been so interested over the years.
Check-ins, for example, allowed you to say to all your friends, "hey everyone, I'm at this bar." It was a way of checking if anyone you knew was there too, or close by, and also a way of inviting your friends to come join you if they were so inclined.
This was extremely popular for a period of time, but then kind of fizzled out, and Foursquare was forced to pivot and try a bunch of other things. And in the end, this "problem" of augmenting the physical world with our social graph (and other information) never really got solved. I mean, this is broadly the promise of augmented reality.
Thankfully, Dennis has a new company (Hopscotch Labs) and a new tech/city product called Beebop (which is currently in private beta). Here's how it works (excerpt from this Crazy Stupid Tech interview):
It's an iPhone app. There's not much to do in the app, there aren't a lot of buttons to press. Once it's installed and you set the permissions, every time you put on your headphones — your AirPods or any other headphones, it doesn't matter—it chimes and says, "Beebop's been activated." (Beebop is the first project from the company, Hopscotch Labs.)
Then as you walk around the city, it will tell you things about certain places. Eventually, if I walk by a place where my friend was, it tells me that Alex was here two days ago. If I walk by a place and someone's inside, it tells me that Max is inside that place. A lot of it is still under development. Eventually, people leave a comment at a place. Imagine Twitter. It is as if you leave a tweet and you stick it in the ground. When you walk over it, you hear it.
So like before, it's about experiencing cities:
It's been a long time since I built something. What's different now? AI is what's different. You know what's different? Everyone's on their phones all the time. Back in my day, we made stuff for the streets. You would use your phone, you'd put it away, and stuff would happen. Where are the people making that stuff anymore? All we make is stuff that makes you look at the screen. Let's make stuff that gets you out in the world, where you're not glued to the devices. You're out there doing stuff. Big companies out there aren't going to make stuff like this.
The key idea here is that augmented reality doesn't have to just be visual. Visual also requires somebody to figure out a cool set of glasses that people will actually wear out in public. Who knows when this happens, though I do think it will eventually.
So what Dennis is doing is making something that works today -- with audio. This has been called the poor person's augmented reality, but I think that's selling it short. This is really clever. And once again, it's fundamentally connected to how people live in and interact with our cities.
When I first saw this picture of Louis Vuitton's flagship store in Manhattan I thought it was AI. That is where we are right now. When something looks wild, I just automatically assume it's fake. But alas, it's not fake. Louis Vuitton is renovating their flagship store at the corner of 57th Street and 5th Avenue and so, naturally, they decided to completely cover it with luggage facade wraps.
These wraps make the entire building look like six grey trunks stacked on top of each other and are a nod to a 19th century luggage design from the company. They even used real metal details throughout. Apparently the heaviest luggage handle weighs something like 5,000 pounds.
This is wild and remarkable in so many ways. The scale of it is remarkable. This is a 15 storey building concealed entirely by luggage trunks. It also speaks to the scale and dominance of New York as a city. Not every city can absorb a pile of giant luggage trunks and not bat an eye. But in New York, it's just another noteworthy thing within its relentless urban grid.
I also can't help but think of the work of architects Robert Venturi and Denise Scott Brown. In 1972, they published a book called Learning from Las Vegas. And in it, they defined two types of contrasting buildings: decorated sheds and ducks. Decorated sheds are, as the name suggests, nondescript buildings. Think big box stores. These buildings get their specificity from signage and other ornament because, without this, they'd just be nondescript sheds.
Duck buildings are, on the other hand, buildings that take on a symbolic form. In other words, their shape and construction tell you what they're all about. The term duck comes from an actual building that looks like a duck, namely The Big Duck on Long Island. This is a building that was built in the 1930s to help promote the owner's duck farming business and is now on the US National Register of Historic Places.
The Big Duck is and was an actual building, whereas Louis Vuitton's trunks are just temporary construction wrap. So they're not exactly the same thing. Still, the similarities are there. Both were erected to promote their respectiveness businesses. And both tell you, through their form, what's meant to happen inside. So in this sense, Louis Vuitton has just created its own Big Duck.
Photo by Brad Dickson via Dezeen
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