Articles Posted in Hyperscale

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Cover-300x227Pillsbury’s experience with data centers dates to the dot-com era. Since then, we’ve counseled the industry as proprietary centers were supplemented, and in some cases supplanted, by physical and cloud-based systems of larger dedicated enterprises. The data center landscape is now international in scope and diverse in speciation, with edge, modular, enterprise and hyperscale facilities each playing important yet distinctive roles, and just as there is no single locus of data center expertise in legal practice, there is no single locus of capabilities and users in the business environment. Pillsbury’s Data Centers team accordingly deploys a one-stop, hub-and-spoke model that reflects the complex ecosystem in which these localized points of computation sit. In an effort to gather these nodes of knowledge and experience into a distinctive publication, the Pillsbury Guide to Data Centers brings together a curated selection of articles which reflects the experience of our firm’s interdisciplinary team in advising clients on the development, acquisition, financing, construction and operation of data centers across the U.S. and internationally. These articles are intended to be enduring reference pieces that lawyers and clients of all levels of sophistication may wish to keep handy as they encounter questions and challenges in this field.

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It seems like such a simple question. Who owns data centers?

Ownership structures in the digital economy are more varied than might appear on the surface. While the largest computing and cloud service providers, such as Apple, Amazon (AWS), Microsoft (Azure) and Google (Cloud)—also known as “hyperscalers”—do own and operate a significant portion of their global infrastructure, they are increasingly partnering with third-party developers and investors, including real estate investment trusts (REITs), to expand capacity and deploy capital quickly and efficiently. This article provides a guide to how the most prominent strategic and financial players are engaging in this sector.

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The rapid growth of electricity demand from data centers has emerged as a major challenge for the U.S. power sector. Much of this demand is being driven by the deployment of large learning models (LLMs) and generative artificial intelligence (AI). These workloads require large-volume, high-uptime computational infrastructure, and correspondingly large, reliable power supplies.

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By one count, worldwide there were some 11,800 data centers in early 2024. Within that census are facilities so small that they fit in office building closets, while others are among the largest manmade structures on the planet. How are we to make sense of this diverse population?

Data centers house servers, storage devices and network devices to store, process and disseminate large quantities of data of organizations and their customers and supply chains. The size and complexity of these facilities vary with their functions in the business ecosystem. Much like the well-known depictions of the evolution of horses from tiny brush creatures to mighty stallions, the overall category cries out to be broken down along multiple dimensions.

This post provides a naturalist’s field guide to data center types and features.

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