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Data Center World
May 24-27, 2027
Music City CenterNashville, TN
The Enterprise Data Center Squeeze: How AI Demand Creates New Pressures

Hyperscalers such as Google, Meta, Microsoft, and OpenAI dominate headlines about new data center construction, building or contracting for campuses up to 1 GW to run AI workloads.

But the rest of the business world—the likes of airlines, banks, hospitals, or carmakers—still depends on data centers to run day-to-day operations. These enterprises also need new capacity to train and run new AI capabilities. And the scramble for data center space has made finding the necessary capacity and equipment more difficult for them.

"For every one hyperscale user out there, there are probably 100 large enterprise users," said Kirk Killian, president at Partners National Mission Critical Facilities, during his conference presentation at Data Center World 2026. "They may not be adding 100 MW at a time—it might be a quarter meg, 1 meg, or 5 megs—but it's still critically important."

Killian, a data center planning consultant who has completed over 400 projects since 1999, outlined the critical differences in what enterprises look for in a data center compared with hyperscalers. As more enterprises run their own AI applications and agents, finding data center capacity becomes critical to companies that drive the everyday economy.

1. Enterprises Deploy a Wider Mix of Infrastructure Than Hyperscalers

Perhaps the starkest difference lies in how enterprises and hyperscalers deploy their infrastructure. A hyperscaler may take 40 MW of capacity in a new AI factory and deploy identical hardware across almost every cabinet in the room. "Whereas the enterprise, in 50 different cabinets, may have 20 different load profiles based on the type of compute they're doing," Killian said.

This diversity creates unique planning challenges. Enterprises must accommodate traditional computing for operations, finance, and HR alongside AI training and inference workloads—all within the same facility. So, while many enterprises are procuring new data centers to deploy mostly 20 to 35 kW per rack today, Killian said, "they want to pick facilities where they can clearly grow that over time to accommodate the 50s, the 80s, maybe some cabinets at 100+ kilowatts."

The challenge, he noted, is "the scalability without stranding a bunch of capacity."

2. AI Inference Raises Enterprise Concerns About Data Security and Control

When enterprises train an AI model, they're often comfortable outsourcing the data center computing to an AI factory that specializes in training—if it doesn't involve live company data. Running AI inference is different.

"Once enterprises are ready to deploy AI inference at scale, they're going to be loading their crown jewels corporate data into those models," Killian said. "Those models then are going to be customer-facing, revenue-producing, or expense-controlling, and those are going to be of vital importance to enterprise users."

Many enterprises will want to run those AI inference workloads in an on-premises data center, colocation facility, or a trusted public cloud where they're highly confident in the security, internal controls, and performance. Speed might be the priority in AI training, but with AI inference, "the number one concern for many large enterprises is data security," he said.

3. Enterprises Have Tighter Location and Connectivity Requirements

While hyperscalers increasingly build massive AI factories far from major cities, enterprises have typically relied on suburban data centers 10 to 25 miles from city centers. In terms of connectivity, rural AI factory locations may have two to four lit redundant fiber providers, whereas even smaller facilities in suburban locations often have eight to 10 different fiber providers.

For AI inference applications requiring low latency, connectivity and proximity become critical. "There's considerable push now to consider edge deployment placement in order to get the very low latency that some of these AI inference applications require," Killian said.

4. Enterprises Need Smaller Capacity That's Getting Squeezed Out

Most of today's enterprise-class colocation data center capacity was built between 2015 and 2022, when "a 20 MW data center used to be a pretty big project," Killian said. A typical enterprise might lease a 2 to 4 MW data hall where they could have full control inside a colocation provider.

Today, 90% of new capacity being built is in the 200 MW to 1 GW campus range, focused on hyperscaler needs. Meanwhile, data center vacancy rates have hit an all-time low, running about 2% across the U.S. "Some markets like Northern Virginia, Phoenix, and Portland are under 1%. 85% of data centers under construction now are pre-leased," Killian said.

That makes it hard for enterprises to find the space they need. Killian used to advise enterprises to start searching 12 to 18 months before they would need data center capacity. Now he recommends starting 24 to 36 months out.

5. Enterprises and Hyperscalers Share One Challenge: Predicting AI Demand

Enterprises are fired up about AI's potential. 74% of respondents to the AFCOM State of the Data Center report say they plan to deploy AI-capable solutions in their data centers. 72% expect AI workloads to increase capacity requirements, with 48% anticipating the impact will be significant. Yet only 34% of companies believe their IT infrastructure is fully adaptable and scalable for AI projects, Cisco's 2025 AI Readiness Index finds.

Enterprises and hyperscalers face a common problem: the AI future is unpredictable. Will a new AI capability emerge that becomes a must-have? Will a new swath of employees within a company need access to AI features? Every question about AI use rolls back to data center capacity, and no one has a clear picture of AI demand more than a few months out. Yet enterprises and hyperscalers alike need to plan data center capacity more than a year out, given how long it takes to secure and operationalize capacity.

"We recommend that enterprises come up with a low growth profile, a most likely growth profile, and then a high growth profile," Killian said.


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Bridging the Gap: 5 Tips for Cross-Functional Collaboration That Enables AI Transformation

Ask ten executives who owns AI at their company, and you’ll get ten different answers. IT says it’s not their call. Legal gets blamed for slowing everything down. HR figures it’s someone else’s department. Meanwhile, teams are buying tools nobody signed off on, duplicating work and hoping it all sorts itself out. Sound familiar?

Lisa Duerre spent the last year studying why that happens. As part of an applied research project for her leadership consulting collective, RLD Group, she studied where AI adoption breaks down inside organizations, and where it works. The findings from RLD Group’s research helped inform a collaboration on the CONVERSATIONS WORTH HAVING®: The Human Accelerator for Artificial Intelligence Quick Start Guide, which is available as a digital download.

Duerre views organizations through what she calls an I–WE–US leadership framework, defined like this:

  • I: individual judgment and accountability

  • WE: workflows and cross-functional coordination

  • US: governance, decision rights and organizational measures

“All three levels are contributing to the breakdown or the alignment, whether people realize it or not,” Duerre says. “AI is amplifying whatever’s already true in your system. The teams that were disconnected before AI showed up are more disconnected now. The ones that talked to each other are moving faster, together.”

If your company is ready to collaborate better with AI tools, Duerre shared the following tips. Take a look.

Form a cross-functional AI committee

Duerre’s background is in HR, and she says most HR leaders assume AI ownership belongs to IT. It doesn’t, at least not exclusively.

“Ownership needs to sit at the system level,” Duerre says. “Each function carries a piece of it, based on what they do, how well they understand that part of the business and how their work depends on everyone else’s. AI is flattening how we work. You can’t just keep it in your own business unit anymore. You have to look all around you.”

For starters, she suggests building a cross-functional AI committee instead of having one department make all the AI decisions. Legal, IT, cybersecurity and HR should be on the committee, Duerre says.

“If you have a C in front of your title, you should be on that committee,” Duerre says. “That’s how I look at it, because it’s a system-level solution.”

During these meetings, Duerre says you’ll find out that some departments are racing ahead with AI and others are holding back.

“Both sides need to name the trade-offs aloud,” Duerre says. “With teams moving too cautiously, you have to talk about the opportunity cost of falling behind. With teams sprinting ahead, you have to ask them what happens if they don’t bring everyone else along with them.”

Figure out how to use AI strategically

Most companies spent the past two years telling employees to use AI with anything, without much strategy behind it. Duerre says that’s starting to catch up with organizations as finance teams scrutinize the cost.

Her rule of thumb: if you can’t articulate the goal and how you’ll measure success, don’t roll it out yet.

“Teams that use AI well have a strategy behind it,” Duerre says. “They’ve kicked the tires on what they’re trying to solve it for. You need to ask yourself, ‘Which business outcome are we trying to improve, and what must be aligned for AI to create measurable value?’”

Here are a few examples of how to use AI strategically:

  • A company could select a workflow that regularly creates delays, redesign it with AI and test the new approach. Then, measure whether it improves time, cost, quality or capacity.

  • Use AI to support early sales outreach and qualification across markets and languages. AI can help a business reach and assess more potential opportunities, while people remain responsible for understanding the customer and building trust.

  • Flag patterns in customer complaints across multiple channels with AI, so leadership can see recurring problems before it shows up in satisfaction scores.

Check-in regularly during an AI rollout

Duerre recommends a minimum weekly check-in during any AI rollout, sometimes daily depending on complexity. But the format matters more than the frequency. Status updates don’t cut it.

“Ask, ‘What are we learning and what are we surprised by?’ That’s a question that helps you with your check-ins, versus, ‘It’s in three products now and we’ve tested six,’” Duerre says. “That doesn't help, because you’re having these meetings to figure out what’s working and why. If you ask more strategic questions, you can move even faster.”

Publish AI guardrails

Employees who don’t know what’s allowed with AI will either freeze or go around the system entirely, Duerre says. She recommends publishing clear, specific guardrails on what’s okay and what’s not. Come up with some real examples, and pair them with an intake process that doesn’t require writing a thesis to get an approval for using it.

"The approval path should be lightweight, not bureaucratic,” Duerre says. “Something like, ‘If you’re going to use AI, here’s the path. And if it needs approval, here’s three or four quick questions for you to answer.’”

Take employee anxiety about AI seriously

“AI is just a tool” is a phrase Duerre hears at nearly every conference she attends, but she doesn’t buy it.

“Saying it’s a tool is underselling what’s happening at companies right now,” Duerre says. “AI is changing how we work. It’s changing how we lead teams.”

Duerre wants leaders to remember that a lot of employees are fearful of AI. Pew Research Center found 52% of U.S. workers are worried about the future impact of AI in the workplace.

Employees who feel AI is being “done to them,” instead of built alongside them are especially anxious, she says.

“Leaders need to recognize that anxiety is contagious,” Duerre says. “As a leader, this is your opportunity to show up as the safe, steady person who is showing what you’re learning with AI. And don’t be afraid to show how you’ve failed using AI, too.”

Duerre asks every executive she works with: “Who am I with AI?” and encourages them to pass this mindset question along to their employees, too.

“AI is now your teammate,” Duerre says. “Phrasing it as, ‘who am I with AI?’ is different than, ‘what’s going to happen to me with AI?’ You really want your team to feel empowered with AI and show them how it can help accelerate their career.”

Put these ideas into action

Rewiring your organization for AI requires more than the right tools. It takes shared language, practical frameworks, and a willingness to keep learning. Here are a few resources to help you take the next step.

  • Enterprise AI Playbook: Practical frameworks and executive discussion questions to help IT, HR, and business leaders align around AI that delivers measurable value.

  • Work-First AI Use Case Assessment: Identify the workflows where AI can have the greatest impact before you invest in new tools.

  • The REWIRED Brief: Get weekly insights, real-world case studies, and practical advice on leading AI transformation.

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