However, the report said, development in more remote regions “will remain challenging” due to a shortage of skilled labor such as mechanics, electricians, plumbers, laborers and construction workers.
Market shift from abundance to constrained
Sanchit Vir Gogia, chief analyst at Greyhound Research, said Wednesday that enterprises must assume, as the report suggests, that there will be elevated pricing for North American data center capacity through at least 2029, and possibly longer. “Vacancy at or near 1%- 2% is not a temporary imbalance,” he said. It is a “signal that supply elasticity has broken. When over 90% of capacity under construction is already pre-committed, new entrants are negotiating from a position of structural scarcity, not market equilibrium.”
“Energy intensity is rising because AI workloads are more power dense,” he pointed out. “So even if an enterprise does not expand its footprint, the cost per deployed workload can still increase because the electrical envelope changes.”
His advice to enterprises: expansion is viable, but only if they diversify beyond legacy Tier 1 hubs, secure long term expansion rights early, negotiate structured pricing protection, and “optimize workload placement with ruthless clarity.”
But, he added, “it is not viable if enterprises assume that incremental megawatts will remain readily available in the same region at roughly similar economics.”
John Annand, practice lead at Info-Tech Research, said that, to compensate, his firm’s client base is increasingly open to moving the right workloads to private clouds or on-premises. “The shift is nuanced, not ideological,” he said, and is usually financially motivated and “framed as hybrid optimization, not public cloud reversal.”
