Atlanta Pushes Back as AI Boom Scarfs Up Property for Data Centers

Adair Park, a spit of land just southwest of this city's downtown, is a neighborhood on the rise.

- WILL PARKER

Part residential, part industrial, it sits next to a train station and the popular Beltline walking trail. Developers have trickled in to turn empty lots and rundown buildings into new housing, co-working space and retail shops.

But here, and across the Southeast's biggest metropolitan area, demand for one type of real estate threatens to crowd out others: data centers.

Space to store and process data for everything people stream, scroll and swipe online is still in short supply. An artificial intelligence race among the world's largest tech companies-the so-called "hyperscalers"-is driving a land rush for ever-larger computing facilities with plentiful power.

Data-center construction is growing faster in Atlanta than in just about any other major city. Measured by power capacity, it was up 76% in the metro area during the first half of 2024 compared with the same period a year prior, according to real-estate firm CBRE.

Meta Platforms, Alphabet's Google, Microsoft and Elon Musk's X all operate Atlanta-area data centers, or are planning new ones. X secured a $10 million local tax break for an expansion this year.

These firms and many other tech companies and property investors are attracted by the city's cheap electricity, state tax incentives and existing fiber-optic infrastructure.

Now, Atlanta is pushing back. More residents and lawmakers worry that the pace of data-center growth-and the amount of land and resources being devoted to it--has gone too far. They say it is starting to compete with more-pressing real-estate needs, like housing and retail stores.

In September, the city council banned new data centers from opening in neighborhoods near transit and the Beltline. An ordinance that would have created an exception to allow data centers in Adair Park was withdrawn this month.