Nashville could see surge in data center development amid AI boom, tech advancements

Nashville could see surge in data center development amid AI boom, tech advancements

  • 24.03.2025 20:42
  • eu.usatoday.com
  • Keywords: danger, success

Nashville is experiencing a surge in data center development due to advancements in artificial intelligence. Companies like Meta and RadiusDC are leading this growth, with Meta's $1 billion Gallatin facility now operational and RadiusDC planning a new 100,000-square-foot site in the city.

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Estimated market influence

Nashville Tennessean

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Analyst rating: N/A

The article is about the surge in data center development in Nashville, and the newspaper's role is to report on this trend.

Meta

Meta

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Analyst rating: Strong buy

Meta has invested $1 billion in a data center in Gallatin, which is now online, and plans further expansions.

Context

Business Insights and Market Implications

Overview

  • AI Boom: The surge in artificial intelligence (AI) models like ChatGPT and Google's Gemini is driving significant investment in data center infrastructure across the U.S., including Nashville.

Key Investments and Developments

Meta's Gallatin Data Center

  • Investment: $1 billion.
  • Capacity: 530 megawatts of power access.
  • Status: Fully operational as of late 2023, with plans for future capacity expansion.

RadiusDC's Nashville I Facility

  • Size: 100,000-square-foot colocation site.
  • Location: 12-acre site at 2902 and 2906 Brick Church Pike, Trinity/Haynes area.
  • Power Access: 12 megawatts.
  • Opening: Planned for sometime next year.
  • Backer: New York-based Blue Owl Capital.

Market Trends

Data Center Growth in Nashville

  • Ranking: Nashville is ranked as a top U.S. market for data center development, behind Kansas City.
  • Established Markets: Virginia, Atlanta, Dallas, and Phoenix are noted as more established markets.

Attractiveness of Tennessee

  • Land Availability: Industrial land is relatively easy and cost-effective to acquire.
  • Energy: Affordable energy with state and local policymakers expanding power capacity.
  • Power Demand: The Tennessee Valley Authority (TVA) is increasing power capacity to meet demand.

Competitive Dynamics

Tech Company Expansions

  • Oracle: Announced move of global headquarters to Nashville, signaling a shift in the city's skyline.
  • RadiusDC: Expansion into Nashville represents its next phase of growth, with a focus on proximity to the urban core.

Real Estate Impact

  • Competition: Data center developers are adding competition to the commercial real estate market, outbidding traditional industrial buyers for land.
  • Location Appeal: Sites like 2902 Brick Church Pike are attractive due to their proximity to industrial areas and accessibility to downtown.

Long-Term Effects and Strategic Considerations

Industry Growth

  • AI Demand: The explosion of AI models is driving sustained demand for data center infrastructure.
  • Hyperscale Data Centers: Facilities with high power capacities (e.g., 530 megawatts) are becoming standard, reflecting the scale of modern tech needs.

Regulatory and Infrastructure Impact

  • Power Expansion: TVA's efforts to increase power capacity will support future growth in data center development.
  • Strategic Location: Nashville's position as a hub for tech companies like Meta and Oracle underscores its growing importance in the tech ecosystem.

Conclusion

Nashville is poised to become a major player in the U.S. data center market, driven by AI advancements, favorable land and energy costs, and strategic investments from leading tech companies. The city's commercial real estate sector is being reshaped as data centers add significant competition to traditional industrial buyers.