Will Ragozzino/ Business Insider
- Prologis, one of the largest warehouse owners in the US, is now building data centers.
- Susan Uthayakumar, an exec at the company, explained the advantages Prologis has against competitors.
- Prologis develops its own microgrids, among other factors.
Land, energy, capital, and experience.
Access to those four things are what gives Prologis, one of America’s largest warehouse owners, an edge in the data center space, said Susan Uthayakumar, the company’s chief energy and sustainability officer, on Tuesday at Business Insider’s “The Resiliency Playbook” event.
“When you have the capital, when you have the land, when you know how to build things, it makes sense for us to be doing what we’re doing,” Uthayakumar said of the company’s growing data center business.
Prologis, which has a portfolio of 1.3 billion square feet across more than 5,500 buildings globally, made its name with warehouses. In recent years, though, it has been growing investment in its data center business.
The company announced in 2023 that it planned to spend up to $8 billion to build data centers across around 20 property sites. Bank of America analysts said spending on data center construction in the US reached a record $40 billion in June, a 28% increase compared to 2024.
Prologis also has access to something that companies like OpenAI and Nvidia are desperate to acquire: energy.
“Whether you operate a data center or a logistics center, energy and power are something that’s becoming more and more relevant because access to it is not so easy,” Uthayakumar said. “So, we’ve built the capability.”
During the company’s second-quarter earnings call in July, Prologis’ CFO Tim Arndt said that they had secured 1.1 gigawatts of power, with 300 megawatts under construction. He said they were in the advanced stages of procuring an additional 2.2 gigawatts. During the next 10 years, the company said it also sees a 10 gigawatts data center opportunity.
Developing AI systems requires a lot of energy, raising concerns about rising electricity costs and power constraints.
Most recently, Nvidia, which makes the chips that run many of these data centers, announced it would invest $100 billion in OpenAI to help it build more of them. The two companies intend to build 10 gigawatts of AI data centers using Nvidia’s chips, which OpenAI uses to power AI.
Uthayakumar said Prologis is the No. 2 generator of on-site power in the US.
“So when I’m building the buildings — we build about 40 million square feet — we make sure that the electrical distribution equipment is the right size for the generation on-site,” she said.
The company also develops its own microgrids, which operate autonomously. Prologis said on its website that microgrids can help “bypass grid constraints, avoid utility delays and meet even the most demanding energy requirements.”
/* .insider-raw-embed + p { display: none; } */
// The Resiliency Playbook
const seriesTitle = “”;
// Presented by
const text = “Presented by”;
// 677be6dd9de00e389eb4700f
const sponsorLogoID = “677be6dd9de00e389eb4700f”;
// PMI Logo
const altText = “The Resiliency Playbook”;
//https://www.businessinsider.com/category/the-resiliency-playbook
const hubOrCatURL = “https://www.businessinsider.com/category/the-resiliency-playbook”;
document.documentElement.classList.add(“gi-sponsor-module”);
if (
document.querySelector(“.gi-sponsor-module”) &&
document.querySelector(“.post-body”) &&
!document.querySelector(“.full-bleed-hero”) &&
!document.querySelector(“.is-enhanced”)
) {
document.querySelector(“.post-hero”).insertAdjacentHTML(
“afterend”,
`
${text}
`
);
}
if (
document.querySelector(“.gi-sponsor-module”) &&
document.querySelector(“.full-bleed-hero”) &&
document.querySelector(“.is-enhanced”)
) {
document.querySelector(“.share-bar”).insertAdjacentHTML(
“beforebegin”,
`
${text}
`
);
}
if (
document.querySelector(“.gi-sponsor-module”) &&
document.querySelector(“.breadcrumbs-wrapper”)
) {
document.querySelector(
“.breadcrumbs-wrapper”
).innerHTML = ``;
}
Read the original article on Business Insider
The post Prologis exec explains why the company has an edge in the red-hot data center space appeared first on Business Insider.
