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As the AI arms race heats up, data centers have become one of the most coveted commodities in commercial real estate. Such is the draw that Related Companies, a privately owned real estate behemoth known for mainly building office, retail, and residential developments such as New York's Hudson Yards, wants in on the action and is planning to raise $8 billion to do so, Bloomberg reports.

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A Competitive Field Amid The AI Arms Race

Related are entering an ever-crowded field. Private equity giant Blackstone (NYSE:BX) and the Canada Pension Plan Investment Board made headlines when they spent $16 billion to acquire Air Trunk, the largest data center operator in the Asia Pacific in September. More recently, JPMorgan Chase (NYSE:JPM) and Starwood Property Trust (NYSE:STWD) agreed to lend $2 billion to construct a 100-acre data campus in Utah. JPMorgan Chase is also backing a $2.3 billion facility in Abilene, Texas. Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG, GOOGL)), and Meta (NASDAQ:META) have each said they will spend $65 billion to $100 billion this year on data centers. 

$45 Billion Development Pipeline

Related's data center arm is Related Digital. The company has a "$45 billion development pipeline of more than 5 gigawatts (GW) of near-term power across the United States and Canada," Related said in a statement. Through initial sponsor commitments, Related is committing a minimum of $500 million to the buildout.

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"Digital infrastructure is one of the most remarkable growth categories and asset classes that I have seen in my more than 35 years in real estate development, driven by the unprecedented demand for data centers with reliable access to significant energy sources," Jeff T. Blau, CEO of Related said in the statement. "Related Digital is uniquely positioned to partner with major technology companies to execute on this massive opportunity," he continued.

A Home For The World's Largest Quantum Computer

The company has earmarked an initial expenditure of $45 billion for several projects in the Midwest. It plans to develop a 400-acre former U.S. Steel South Works site along the Lake Michigan shoreline, creating a state-of-the-art campus at 8080 Lake Shore Drive in Chicago. When completed, it will be one of the largest contiguous infill waterfront properties in the country, according to the company. The development will include a new 128-acre campus for PsiQuantum, which plans to build the world's largest quantum computer there.

Other projects include data centers of over 500 acres in Illinois, over 600  acres in Missouri, and 115 acres in Wyoming.

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High Energy Use And Emissions Fears

The rapid upscaling of data centers has created concerns about the energy required to power them and carbon emissions. The International Energy Agency  stated that in 2023, investment from Google, Microsoft, and Amazon was higher than that of the entire US oil and gas industry—totaling around "0.5% of US GDP." Google in July reported a 13% emissions increase in 2023 due to its data centers.

Elio van Puyvelde, chief information officer at AI cloud platform Nscale, told Data Center Magazine: "Ensuring data centers are built where there is a stable supply of renewable power is one thing, but the industry must focus on maximizing efficiency too. The reality is AI workloads are so often poorly optimized, wasting energy use and delivering poor returns."

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This article New York Developer Related Looks To Raise $8 Billion For Data Center Investment originally appeared on Benzinga.com