Atlantic: Silicon Valley Slips in the AI Data-Center Race

Silicon Valley is now the sixth-largest data-center market in the United States, a shift The Atlantic frames as the region's digital advantage running into a physical buildout it can no longer host. "By dominating the digital world, Silicon Valley has already exerted indirect control over the physical one," the magazine writes. "Today's data-center build-out is a whole new beast."

The numbers are stark. Bay Area data-center power capacity grew by 25.2 megawatts in the year through June, to 484.4 megawatts, Yahoo Finance reports. Atlanta added 969 megawatts over the same window. Northern Virginia, the dominant hub, holds roughly seven times Silicon Valley's capacity.

California's high energy costs and taxes, its absence of data-center tax breaks, and what one summary calls "lots of physical and political constraints" on grid supply account for much of the drift. Bisnow put it more bluntly: the region is regarded now less as a global or regional cloud computing hub and more like Boston or Los Angeles, "large but low-growth markets."

Two of the analysts we follow shared the Atlantic piece when it ran.