Data centers are locations that house computing infrastructure, including hardware for data storage and processing and network equipment that connects these components. Serving as the physical backbone of the digital age, data centers provide round-the-clock support for cloud-based applications (e.g., Google Docs), online financial services, streaming platforms, and generative AI systems. As of February 2026, about 37% of the world's 10,974 data centers have been built in the US, with construction largely accelerated by growing AI demands.
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These facilities house rows of vertical racks containing multiple types of hardware, including servers that provide 24/7 access to online applications, services, and data. In a hyperscale center with thousands of these racks, the annual electricity used is estimated to equal that of 400,000 electric vehicles.
Punch card computers from the late 1940s were used to store and process a company's data locally before the advent of desktop computers. As the amount of data and company sizes increased alongside the miniaturization of technology, mainframes were replaced by local server rooms and external facilities with interconnected servers running cloud-based and AI software.
Alongside server rooms for the storage, processing, and transmission of data, data centers include climate control systems to manage the heat generated by microchips, backup systems to ensure systems can run during power outages, offices for on-site personnel, and monitoring and security stations to provide continuous protection against physical threats.
Enterprise data centers are built on-premises and afford businesses greater control over the management and security of their data. Cloud data centers are built off-site and share their resources with millions of users through an internet connection, with the largest—hyperscale data centers—spanning millions of square feet. Managed data centers offer off-site hardware that companies can lease.
Computer equipment can be cooled by circulating cold air or water through the equipment racks, siphoning the heated fluid into a heat exchanger. This exchanger transfers thermal energy to building cooling systems, which can dispose of the heat by evaporative cooling—the way humans cool off by sweating—or via air conditioning.
Date from 2023 suggests that data centers accounted for around 4.4% of US electricity consumption, with new facilities supporting the AI boom consuming more power than the state of New Hampshire annually. However, the energy impact of individual use varies widely depending on the prompt and AI model. (Some readers may experience a paywall.)
Each query uses approximately one single-serving water bottle per conversation, but water is also used for steam cycles and cooling in power plants that generate electricity for data centers. Newer cooling methods, such as immersion cooling, where servers are submerged in fluids that don't conduct electricity, can minimize water use.
The country with the most data centers relies on other nations for about 80% of the rare earth elements needed for magnetic materials in storage drives, 64% of the silver and 85% of the platinum it uses for electrical circuitry, and about half the aluminum and copper used in heat sinks that dissipate thermal energy from electronic components.
The parallel processing needed to power large language models for AI chatbots and other tools drove demand for high-speed graphics processing units to spike in 2025, enabling capital-rich technology companies to price out consumers. Similar demands for the computer memory used in storage drives are expected to keep shortages from easing through 2028.
As of February 2026, the US has more data centers (over 4,000) than the next 15 countries combined, thanks to years of investment by cloud service providers and technology companies. The next largest data center footprints come from the UK and Germany, with about 500 facilities each, followed by China with about 370.
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