P
resident-elect Donald Trump's administration has announced significant investments in artificial intelligence (AI) infrastructure, with SoftBank CEO Masayoshi Son committing $100 billion to create over 100,000 new jobs in AI and related fields. This was followed by a $20 billion investment from Dubai-based luxury property developer Damac in the Midwest and Sunbelt for AI data centers and chip making.
New York State is also seeing significant investments in AI infrastructure, with chip makers committing $112 billion to the Albany NanoTech Complex. This will unlock $825 million in federal funds for research and development. The complex will be home to CHIPS for America EUV Accelerator, one of three National Semiconductor Technology Centers.
For brokers and building owners still recovering from the pandemic, AI investment is a welcome boost. New York has seen an exponential growth in AI firms over the last decade, with companies expanding from less than 450,000 square feet to over 4.8 million square feet. Many AI firms are headquartered in Silicon Valley but are finding the talent they need in New York.
CBRE reports that there are already nearly 190,000 high-tech jobs in Manhattan, with "more help" wanted ads posted each day. The demand for skilled workers is driving up rents, with asking prices ranging from $125 to $145 per foot. Companies like OpenAI and Harvey are leasing large spaces in the city, while others are moving from smaller submarkets to areas like Chelsea and Hudson Square where they can scale up.
To support AI growth, building out energy resources is crucial. AI tenants often need 10 times more electrical capacity than traditional tenants due to their heavier computational draw. DataBank will complete a 45 megawatt center in Orangeburg that will link to its Manhattan locations, while Mawson Infrastructure Group is investing in former industrial sites.
The growth of AI companies also requires underground highways and fiber optic infrastructure. Companies are buying up dark fiber at a rapid pace, creating new construction jobs. However, there are concerns about the potential for another dotcom bubble, where companies overextend themselves and quickly burn through their venture money.
