How the Industry Is Solving the Data Center Space Crunch in 2024

The Data Center Capacity Crunch: A Growing Challenge

The demand for data center space has never been higher. Fueled by cloud growth, AI infrastructure, and a rapidly expanding digital economy, organizations around the world are racing to secure the compute and storage they need.

But with limited available capacity, ongoing power constraints, and construction delays, the industry is under pressure to adapt fast.

So what’s actually being done to alleviate the shortage?

Let’s explore the key strategies reshaping the data center landscape.

1. 🔌 Strategic Use of Renewable Energy

Power is one of the biggest bottlenecks in delivering new data center capacity. In response, providers are building new facilities near renewable energy sources like solar, wind, and hydro to guarantee long-term energy availability and reduce their carbon footprint.

• Google and other hyperscalers are partnering with energy providers to ensure 24/7 renewable supply for their growing AI workloads
• These renewable-adjacent builds are especially popular in the Southwest, Pacific Northwest, and parts of Europe

By aligning location strategy with energy access, data center operators are getting creative—and greener.

2. 🏗️ Modular & Prefabricated Data Centers

To meet rising demand without waiting years for traditional construction, many providers are deploying modular or prefabricated data centers.

These facilities can be:

• Built faster (sometimes in just 6–12 months)
• Scaled incrementally based on demand
• Placed in edge or remote locations to support localized workloads

Modular builds are helping close the gap between rising demand and limited legacy infrastructure.

3. ⚛️ Exploring Advanced Nuclear Power

To meet the energy needs of high-density AI and GPU workloads, some industry leaders are investing in nuclear energy as a long-term solution.

• Companies like TerraPower (backed by Bill Gates) are working with operators like Sabey Data Centers to explore small modular nuclear reactors (SMRs)
• The goal: clean, scalable, stable energy for large-scale AI infrastructure

This innovation is still in the early stages but could be a game-changer for powering next-gen data centers.
(Source: The Verge)

4. 🧊 Advanced Cooling & Higher Density Design

Cooling is one of the most power-intensive aspects of running a data center. To support growing demand, providers are deploying next-gen cooling technologies like:

• Liquid immersion cooling
• Direct-to-chip liquid cooling
• AI-driven energy optimization systems

These methods reduce power usage and allow for denser deployments, especially critical for AI and machine learning workloads.

5. 🏛️ Government Support & Policy Changes

Recognizing the strategic importance of data infrastructure, governments are stepping in to accelerate capacity growth:

• In the U.S., an Executive Order signed in early 2025 fast-tracks permitting for AI-focused data centers and opens federal land for development
• The goal is to reduce red tape, expand access to land and power, and prioritize the buildout of digital infrastructure

This could unlock new capacity in previously constrained markets.
(Source: The Verge)

What This Means for You

While these solutions are promising, they take time. Demand is still outpacing supply in many major markets, and available space remains limited in 2024.

To stay ahead, IT and infrastructure leaders need to:

• Plan earlier
• Stay informed on upcoming availability
• Work with partners who have real-time visibility into the market

How Arkitech Group Helps You Stay Ahead

At Arkitech Group, we give you access to space others don’t see yet—thanks to our partnership with Bridgepointe Technologies and deep network of global providers.

We help you:

✅ Identify available space before it goes public
✅ Compare options across markets and providers
✅ Navigate cloud, colo, or hybrid strategies
✅ Secure favorable terms—at no cost to you

Whether you need short-term capacity or are planning for long-term growth, we’ll help you make the right move—before space runs out.

👉 Check real-time availability now
👉 Or explore colocapacity.com for more options

Want help planning for Q2 or comparing space in multiple markets? Let’s talk.