Five miles south of downtown Los Angeles, a single industrial block in Vernon uses as much electricity as a small town.
Inside a three-story, 242,000-square-foot building known as LAX01, rows of advanced artificial intelligence chips buzz through six data buildings, consuming enough electricity to power more than 26,400 homes for a year. The processors are part of a growing network of data centers that is reshaping this rusty industrial corner of Los Angeles County.
Vernon has a population of just over 200 and a long and colorful history stemming from its industrial roots. Over the years, the country has been plagued by corruption scandals and accusations of environmental pollution.
It was once on the verge of becoming unincorporated, following accusations that it had been controlled for decades by a small group of families and their associates. His story helped inspire a season of the HBO crime drama “True Detective.”
Today, Vernon is becoming an unlikely hub for Southern California’s AI infrastructure.
“The race for superintelligence is reshaping infrastructure requirements across all industries,” said Michael Wall, executive vice president of Prime Data Centers, which built the Vernon data center. “We are focused on giving businesses the foundation they need to build and deploy the next generation of AI models – faster, more efficiently and at scale. »
Prime and other developers, including Goodman Group, CoreSite and Digital Realty, are planning hundreds of megawatts of new data center capacity in Vernon, said Darren Eades, managing director of JLL, which specializes in data centers.
Companies are taking over Vernon properties and modernizing them, adding advanced cooling systems to old office buildings and filling a closed slaughterhouse that once housed pigs, with advanced chips.
“We haven’t seen new data centers develop in a long time in Southern California,” Eades said. “There’s a new wave hitting the coast, primarily powered by AI.”
Construction is taking place across the country.
By 2025, Google, Amazon, Microsoft and Meta have invested $465 billion in building computing and network infrastructure for AI, according to Goldman Sachs.
A Harvard economist estimated that without investments in data centers, growth in U.S. gross domestic product could have come to a near standstill this year.
Los Angeles has more than 70 data centers. Their hub has long been the One Wilshire building in downtown Los Angeles. It is the destination of the enormous submarine cables that connect the United States to Asia.
All major telecommunications carriers are located in the building, creating a dense data center ecosystem for providers such as Netflix, Amazon and Microsoft.
As One Wilshire has become increasingly populated, data center companies have moved to Vernon, attracted by its independent, relatively inexpensive electricity and proximity to One Wilshire.
Vernon operates its own utility which provides its customers with electricity, water, gas and fiber optic internet. With this, the city can offer excess electric capacity at rates as low as half those of other Southern California providers.
Vernon is also appealing because of his lack of NIMBYism.
Its population is so small that there are few neighbors to notice or protest any potential noise pollution or other environmental effects of data centers.
Across the country, communities have blocked or delayed billions of dollars of planned investments in data centers, fearing they would consume too much water and lead to higher electricity rates.
Opposition occurs in red and blue counties and affects both urban and rural communities. A local example is the ongoing delay on a data center project in Monterey Park.
Vernon responded to a request for comment by sharing a frequently asked questions document stating that construction will not affect electricity prices or water availability for residents or businesses.
“No additional electricity or water purchases are necessary to meet the new electricity load and water demand – costs that in other utility jurisdictions often result in rate increases,” the document states.
“To date, the City has not received any objections from the community,” a spokesperson said in an email.
Some analysts say that increased demand for electricity, along with rising costs of building the infrastructure needed to provide it, will inevitably lead to higher electricity rates.
California is already the third largest data center hub in the country, after Texas and Virginia. Energy consumption is expected to reach a record high due to data center-related electricity demand. Utilities such as Pacific Gas & Electric plan to spend $73 billion to upgrade transmission lines.
A Bloomberg analysis shows that in five years, electricity costs have increased by up to 267% in areas near data centers.
California has historically been a market that data centers have tried to avoid when possible due to high land and electricity costs and onerous legislation.
JLL’s Eades pointed out that local law limits projects to 49.9 megawatts of power to avoid excessive red tape and licensing requirements for larger installations. This is one reason why the proposed data centers in Vernon are below this threshold.
Yet the demand for AI continues to grow. If this continues, even Vernon’s excess power, analysts say, could reach its limits due to the influx of new data centers.
“We didn’t use to talk in megawatts when we thought about data centers; we just thought in terms of kilowatts,” Robert Brooks, vice president of sales at Lambda, a cloud computing company that leased the majority of the LAX01 data center.
