In Piketon, Ohio, stands the former Portsmouth Gaseous Diffusion Plant, a uranium site built for the Cold War.
In March 2026, the Department of Energy announced a new use for it. It would host a data center of 10 gigawatts, along with up to 10 gigawatts of new power plants to feed it, 9.2 gigawatts of them burning natural gas. SoftBank's energy arm would partner with the local utility, AEP Ohio, and the government cited $33.3 billion of Japanese money for the gas plants under a trade agreement. Energy Secretary Chris Wright said the project would "ensure the United States wins the AI race." Five months later, OpenAI announced that it had secured 8 gigawatts at the Ohio campus. CNBC called it the world's largest planned AI campus and put the possible cost above $500 billion.
Half a trillion dollars, at one site. A year and a half earlier, that had been the price tag on the whole of Stargate, announced from a podium at the White House.
Then Ohio voted. On November 3, 2026, voters across ten states faced forty-one local ballot measures on data centers, and twenty-one of them were in Ohio. They went against the data centers in every one but a single town in North Dakota. Ohio elected a governor, Amy Acton, who had backed a "conditional moratorium" on new data centers. Two days later the Nasdaq had its worst day in nineteen months, and the index of chip stocks fell more than 12 percent.
A Cold War uranium plant turned into an AI factory. A trade agreement paying for gas turbines. A price tag of half a trillion dollars. And a vote of no from the neighbors. In 1999, the buildings at the ends of Level 3's fiber were real estate, and dull real estate at that. Nobody campaigned on them. Most people never noticed them at all, and most still don't. They are windowless, gray and set back from the road. They hum. They sit in office parks in Ashburn, in old freight terminals in Manhattan, in a former Electrolux factory in Memphis, in the farm fields of Loudoun County and in a county seat in Oregon. And every text message, video stream, bank transfer and chatbot answer you've ever sent or received passed through one of them.
This book is about those buildings, the people who built them, and the money that came and went with them.
Everything but the Computer
The building is older than the Internet.
In April 1964, IBM chartered a special train to carry several hundred writers up the Hudson to watch it announce the System/360. The machines rented for $2,700 to $115,000 a month, and every company that rented one had to build a room for it: raised floor, air-conditioning, power, guards. The industry came to call it the glass house. Within a year, the New York Times was writing about "the computer center as a public utility" and quoting an executive's prediction for the "data-center industry."
In August 1983, the Times took its readers into a cave in the Catskills, behind a seven-ton steel door, where a disaster-recovery company kept a computer room waiting, lit and empty, for a customer whose own glass house might burn down. It had a "raised floor, air-conditioning, telecommunications hookups - in short, everything but the computer."
Everything but the computer. That phrase describes the product the entire data-center industry sells to this day. Someone else builds the room. Someone else brings the power, the cooling and the connections to the outside world. You bring the machines, or you rent them by the hour. The industry has spent sixty years arguing about who should own that room, who should pay for it, and how big it should be. The answer has changed every decade or so, and every time it changed, fortunes were made and lost.A few terms recur throughout this book, and they are worth defining at the start, the way Bandwidth's first footnote defined the Internet Backbone. A data center is a building, or a part of one, designed to house computers: it supplies reliable power, usually with batteries and generators for backup, cooling to carry away the heat the machines produce, physical security and connections to outside networks. The "glass house" of Chapter I was a company's own data center. Colocation is renting space and power inside someone else's data center for your own equipment. In retail colocation, a customer rents a cage or a few racks, buys power by the circuit and pays to connect to other tenants; in wholesale colocation, a customer leases a large block of space with its own dedicated power, often a megawatt or more, for several years. A carrier hotel (or "telecom hotel") is a building, often an old telegraph, telephone or industrial building, where many network carriers rent space to house their equipment and connect to one another. Interconnection is the business of connecting those networks and customers to each other inside a building, either through a shared switch at an Internet exchange point or through a cross-connect, a physical cable between two tenants' equipment, which is the smallest product in the data-center business and one of the most profitable. Hyperscale describes the largest buildings and campuses, built for or by the handful of cloud and AI companies, and measured in tens or hundreds of megawatts and, in the AI era, in gigawatts. A megawatt is a million watts. A gigawatt is a thousand megawatts, a bit more than the output of the nuclear reactor at Three Mile Island that Chapter VIII brings back to life.
Two Cycles and a Prologue
In Bandwidth, I told the story of the fiber business through a single cycle: Boom, Bust, Phoenix and Reconsolidation. The Boom of the late 1990s built the networks. The Bust of the early 2000s wiped out over a trillion dollars of value. The Phoenix rose from the wreckage, as buyers with cash picked up hard assets for pennies on the dollar. And over the next two decades, the industry slowly reconsolidated into a handful of national platforms.
The data-center business ran the same cycle, on the same calendar, often with the same people. Then it started running it again.
So this book has three parts.
The first is a prologue cycle, from the 1960s to about 1990. Computing was centralized in the glass house, and entrepreneurs figured out that most companies didn't want to own one. Ross Perot ran other people's computers under contract. Time-sharing companies rented computer time by the hour, forty years before the cloud. Sam Wyly rode that idea to a Market Value larger than Western Union's and then rode it back down. It was the industry's first Boom and Bust, complete with forecasts that ran ahead of reality, acquisitions paid for in stock and a write-down of the computers themselves. Then the personal computer arrived and seemed to kill the glass house.
The second part is the first full cycle, from the mid-1990s to about 2022. The Internet pulled computing back into buildings. In the late 1990s, the hosting Gold Rush raised billions on forecasts. By 2001, the forecasts had collapsed and the floors were empty. Out of the wreckage rose Equinix and Digital Realty, which bought finished buildings cheap and filled them. Then the cloud arrived, and a handful of giant tenants came to control most of the demand. By the eve of ChatGPT, private capital had bought up much of what was left, and data centers had become a mature, consolidated asset class, priced like a bond.
The third part is the second cycle, which began on November 30, 2022, the day OpenAI released ChatGPT. It is still in its Boom phase as I write this. Nvidia became the most valuable company in the world, selling the chips. The cloud companies began spending more on buildings and equipment in a single year than the whole fiber industry spent in the three years of its Boom. Three Mile Island is being brought back to life to power one company's data centers. And the scarce thing this time is electricity.
Where Bandwidth ended with a question about the next cycle, this book ends inside it. The question I asked at the end of Bandwidth still stands: are we before midnight, or after?
The Survivors
The bigger the mess, the longer it takes to clean up. In Bandwidth, it took two decades for the fiber industry to reconsolidate into four national providers: AT&T, Verizon, Lumen and Zayo. The data-center business did its cleanup faster, and it ended with a different cast. By the time the AI Gold Rush began, four groups stood on top.
The first is Equinix. It was founded in 1998 by two veterans of a Palo Alto Internet exchange, Jay Adelson and Al Avery, on a bet that sounded too simple to work: don't run anyone's servers and don't sell anyone's bandwidth; own the room where the networks meet and charge them to connect to each other. Equinix went public in August 2000, five months after the Nasdaq peaked, and traded for 30 cents a share in 2002. A rescue from Singapore and a run of bargain buildings from the Bust brought it back. Under Steve Smith, a friend of mine who later took my old chair at Zayo, it grew into the meeting place of the Internet in most of the world's big cities, with 175 data centers in forty-four markets by 2017.
The second is Digital Realty. A real-estate fund called GI Partners bought twenty-five data centers when nobody wanted them, leased them to companies like IBM and Cisco, and in 2004 took most of them public as the first data-center real-estate investment trust. Digital Realty was the landlord that barely noticed the 2008 crisis. Between 2015 and 2020 it bought Telx, DuPont Fabros and Interxion, and went from an American landlord of big, powered buildings to a global company in both wholesale and retail.
The third is the cloud companies: Amazon, Microsoft, Alphabet and Meta. They began this story as tenants. When Amazon started renting computers by the hour in 2006, the data-center business gained the largest customers it had ever seen. Then those customers learned to build their own buildings, in river towns in Oregon and potato towns in Washington, and they shifted the balance of power from the people who own data centers to the people who fill them. In the AI era, they are the biggest builders in the history of the industry.
The fourth is private infrastructure capital: Blackstone, KKR and Global Infrastructure Partners, Marc Ganzi's DigitalBridge, Stonepeak, EQT, Brookfield, Macquarie and the rest. Some of these are the same pools of money that bought Zayo, and some of them bid against each other to do it. Between 2015 and 2022, they bought nearly everything Equinix and Digital Realty didn't, including four data-center companies worth about $46 billion in eleven months. To them, a data center leased to a cloud giant for fifteen years was a stream of cash from the best credit in the world.
Behind the four survivors comes a new crowd, the Gold Rush companies of the AI era. Nvidia sells the chips. Oracle, CoreWeave and a swarm of developers build and rent the capacity. OpenAI, Anthropic and Elon Musk's xAI are the customers whose commitments fill the order books. None of them has yet lived through a Bust. In Bandwidth, I wrote that the companies that failed were the ones that confused building with earning. Some of the companies in the last chapter of this book are building faster than anyone in history. We'll see which of them are earning.
What I Saw, and What I Didn't
I come to this story from the fiber side. I said so in the note at the front of this book, and I'll say it again here, because it shapes what follows. At MFS, my employer built MAE-East, one of the first places where the Internet's networks met. At Level 3, I ran the network when we built data centers in most of the big cities. At Zayo, we ran our fiber into every carrier hotel and data center we could reach, and for about eleven years we owned a colocation business, zColo, which our new owners sold in 2020.
That gave me a good view of the buildings from the outside, standing where the fiber came in the door. It didn't put me inside the boardrooms of Exodus or Equinix or Digital Realty. So for most of this story, I rely on the reporters who covered it, and on the companies' own filings. Where I was there, I'll tell you. Where I wasn't, I'll tell you that too.
The Chapters
Chapter I, "The Glass House," covers the 1960s through the 1980s. IBM rents its computers by the month and becomes the landlord of corporate computing. Ross Perot builds EDS by running other people's computers and sells it to General Motors for $2.55 billion. GE, Tymshare and a swarm of imitators rent computer time by the hour, and the time-sharing Boom ends with a beer mug crashing down on your fingers. Comdisco and SunGard sell companies a spare computer room in someone else's building. And in 1989, Kodak hands its data centers to IBM, asking only to "plug into a wall and have data come out."
Chapter II, "Where the Networks Meet," covers 1986 to 1997. The government steps back from running the Internet. MFS sets up MAE-East in a Virginia office building, and a Digital Equipment researcher puts an exchange in the basement of Palo Alto's old phone building. In New York and Los Angeles, a telegraph palace, a freight terminal and an office tower become carrier hotels. And UUNET and AOL plant the first seeds of Data Center Alley in the farm fields of Loudoun County. The building where networks meet turns out to be worth more than the networks.
Chapter III, "The Hosting Gold Rush," covers 1996 to 2000. Exodus grows from a Sunnyvale office with no ceiling to a Market Value of more than $20 billion. Equinix makes the opposite bet, on neutrality. Bernie Ebbers pays about $6 billion to win Digex, in what WorldCom's John Sidgmore later called "the stupidest deal of all time." The carriers pile in, including my own Level 3. And the first warning comes from the power company, when one hundred server farms ask PG&E for 1,200 megawatts.
Chapter IV, "Empty Floors," covers 2001 to 2003. Only 22 percent of the data-center space in North America is used or sold. Exodus files for bankruptcy, and its best thirty data centers sell for about 4 percent of its peak Market Value. Global Crossing, PSINet, Genuity and the rest follow. Danny Lewin of Akamai dies on American Airlines Flight 11. The customers stay in the buildings. Only the names on the deeds change.
Chapter V, "The Phoenix," covers 2002 to 2010. Equinix buys the guts of a finished San Jose data center for about $900,000. GI Partners turns twenty-five unwanted buildings into Digital Realty. Rob Roy turns a $930,000 Enron leftover into Switch. Savvis buys the remains of Exodus for $155 million. And the 2008 crisis proves that a building full of real tenants on real leases survives even when the banks don't.
Chapter VI, "The Cloud Eats the Building," covers 2006 to 2016. Amazon rents computers by the hour on a credit card, which is Tymshare all over again. Google, Microsoft and Facebook build their own data centers in places nobody in the hosting business had heard of. Loudoun County becomes Data Center Alley. A new breed of wholesale developer goes public. And a fiber company in Boulder, Colorado, decides it should own some buildings too. That company was mine, and that section is as close to a memoir as this book gets.
Chapter VII, "The Reconsolidation," covers 2015 to 2022. Digital Realty and Equinix buy their largest rivals on both sides of the Atlantic. The phone companies that bought data centers at the top of the last cycle sell them back out. And private capital buys nearly everything else, including Zayo and, later, zColo. On the eve of ChatGPT, a data center looks like a bond.
Chapter VIII, "The AI Gold Rush," covers 2022 to today. Nvidia's data-center revenue goes from about $15 billion to $193.7 billion in three years. Stargate promises half a trillion dollars from the White House. CoreWeave, a former crypto miner, becomes this cycle's Exodus, or maybe its Global Crossing. Elon Musk powers Colossus with gas turbines on trailers. The cloud companies outspend the fiber Boom. A shuttered nuclear reactor is brought back to serve one customer, the grid runs short of capacity, and voters push back. Anthropic files to go public. And the ghost of Andrew Odlyzko asks whether today's forecasts are any better than the ones that sank the last Boom.
Chapter IX, "Before Midnight," keeps score. It weighs the survivors and the newcomers against each other, lays out the ways this cycle might end, and offers the lessons of two cycles in the plainest terms I can find.
Your Story, Too
In Bandwidth, I wrote that the story was also yours, because Boom and Bust cycles repeat themselves. I wrote that the next one was already ignited, and that it entwined AI with other new technologies. I didn't know then how fast it would arrive, or that it would arrive in the buildings at the ends of the fiber.
The pattern in this book is older than the Internet. A real idea attracts a forecast. The forecast attracts capital. The capital builds ahead of the demand, on borrowed money, and the stock price runs ahead of the forecast. When the forecast comes down, the companies that borrowed against it go bankrupt. The buildings survive. Buyers with patience pick them up for a fraction of what they cost, fill them with tenants and make fortunes. Then the industry consolidates, the survivors get comfortable, and something new arrives to start the music again.
It happened to time-sharing in 1969. It happened to hosting in 2001. Whether it happens to AI is the question at the end of this book.
I can't tell you when the clock will strike midnight. Nobody can. Buffett's point was that the clocks at the ball have no hands. What I can do is show you the last two times the music played, who was dancing, who left early and who stayed too long. If you know the pattern, you'll recognize it when it comes around again.
It's coming around again right now.