The buzz around artificial intelligence (AI) that erupted in the past year turned commercial real estate’s attention on data centers: namely whether they could support the pace of AI’s quickening advance, from building design and rack densities to its environmental impact and compliance with evolving government regulations.

“Data centers only rose to prominence for AI in 2024, though they have long been the backbone supporting AI's progress,” says Dr. Glen Duncan, Head of Data Center Research, Asia Pacific (APAC), JLL.

“The availability of AI to the masses drove the rapid and profound growth of data centers, raising concerns about their ability to handle the immense computational needs,” says Duncan.

The primary focus lies in the rack densities, or the amount of power the equipment within a server rack uses.

Companies that operate data centers have ramped up rack densities from 3 kilowatts (kW) a decade ago to the current average deployment of 10kW per rack. Still, that’s barely sufficient for AI and high-performance computing, which require rack densities of up to 100kW per rack.

Some operators are already leading the charge. Take data center giant Digital Realty, which recently launched a high-density colocation service for workloads of up to 70kW per rack.

“Data centers will have to undergo design and structural updates to accommodate AI workloads,” says Celina Chua, Data Center Client Solutions Director, Capital Markets, APAC, JLL. “These modifications must cater to the increased power consumption, floor loading, and heat generation associated with higher rack densities.”

The emphasis on efficient energy usage comes amid mounting pressure on data centers to adhere to more stringent environmental, social and governance (ESG) regulations.

In Australia, for instance, data center providers pursuing government contracts must have a five-star National Australian Built Environment Rating System (NABERS) rating, and a target power usage effectiveness (PUE) below 1.4.

The German government recently approved legislation requiring data centers opening from July 2026 to achieve a PUE of 1.2, and to implement measures to reuse at least 20% of their waste heat by 2028.

“Regulations around data centers will continue to build out in every country, be it on ESG or other aspects like data privacy and data sovereignty,” says Duncan. “Countries that are lagging behind on legislation will have to catch up eventually.”