UPDATE: Southern California’s industrial city of Vernon has emerged as an unexpected hub for artificial intelligence, rapidly transforming into a crucial player in the tech landscape. A powerful data center, known as LAX01, is now consuming enough electricity to power over 26,400 homes for an entire year, signaling a new era of AI infrastructure development in the region.
Just announced, the center’s advanced AI chips are part of a broader surge in data center construction across the country. Michael Wall, executive vice president at Prime Data Centers, stated, “The race toward superintelligence is reshaping infrastructure requirements across every industry.” As demand for AI capabilities skyrockets, developers are racing to meet this urgent need.
Vernon, with a population of just over 200 residents, has a history marked by corruption and pollution, but it is now attracting major investments from tech giants. Companies like Google, Amazon, Microsoft, and Meta have collectively invested a staggering $465 billion into building AI infrastructure. Analysts warn that without these investments, the U.S. GDP growth could have faced a severe downturn this year.
As competition heats up, other data centers in the region are feeling the pressure. Darren Eades, managing director of JLL, remarked, “We haven’t seen new data center development in a long time in Southern California.” The influx of AI-driven projects is changing the narrative, with developers eyeing Vernon for its relatively low costs and independent utility services.
Vernon operates its own utility, which offers electricity rates that can be as low as half of those from competitors in Southern California. This has made it an appealing location for data center projects, especially as other communities across the nation face backlash against new developments. In stark contrast, Vernon has reported no objections from its small community regarding these data center expansions.
However, concerns loom about the long-term sustainability of this growth. With California already being the nation’s third-largest data center hub, power consumption is projected to reach unprecedented levels, prompting utilities like Pacific Gas & Electric to invest $73 billion in upgrading infrastructure. A recent analysis by Bloomberg revealed that electricity costs in areas near data centers have surged by as much as 267% over the past five years.
Despite local legislation limiting projects to 49.9 megawatts of power to streamline regulatory processes, the demand for AI continues to escalate. If this trend persists, analysts caution that even Vernon’s abundant power supply may reach its limits, threatening the very foundation of this burgeoning tech hub.
As tech companies scramble to harness the power of AI, the eyes of the industry are fixed firmly on Vernon. The developments here are not just reshaping the local economy but could also signal a significant shift in the future of data infrastructure across the entire state. The urgency for businesses to adapt and innovate has never been more pronounced.
Stay tuned for further updates as Vernon continues to evolve into a key player in the artificial intelligence race, redefining what it means to be an industrial city in the 21st century.
