From AI to Absorption: Office Demand, AI Talent Concentrations, and What it Means for Data Centers

FROM AI TO ABSORPTION Office Demand, AI Talent Concentrations, and What it Means for Data Centers

JANUARY 2024

1

TABLE OF CONTENTS

01 02 03

04 05 06

07 08

AI COMPANY LANDSCAPE

FUTURE TRENDS & CONSIDERATIONS

KEY TAKEAWAYS

COMMERCIAL REAL ESTATE OVERVIEW

DATA CENTER OVERVIEW

METHODOLOGY

DEMOGRAPHICS & EMERGING MARKETS OVERVIEW

AI TALENT LANDSCAPE

2

Key Takeaways

3

Artificial Intelligence Sector Key Takeaways

AI Companies

Demand for Office Space

AI Talent

• AI Tenant Demand highest in SF Bay Area (2.5 msf). • Most active demand in Silicon Valley. • Austin is the market with the 2nd highest tenant demand, but it is largely concentrated with a single, large tenant requirement.

• AI talent demand is high with 5,550 unique job postings each month on average in the U.S. • California is a powerhouse for AI-related talent. Three California cities are in the top 10 MSA’s for AI talent. • AI-related degree conferrals in the U.S. have nearly tripled since 2010.

• California has the highest concentration of AI firms in the U.S., most of which are in the San Francisco Bay Area. • Spending for AI in horizontal and vertical applications is expected to increase 123% from 2022-2025. • VC funding for AI peaked in 2021 but remained level in 2023 while overall VC funding fell 38%. Horizontal platforms have been the most resilient.

Data Centers

Demographics

Future Trends

• The semiconductor market is expected to see significant growth through 2030. • Spending on data center systems, infrastructure and public cloud services is rising. • Electricity costs vary greatly across states and impact large language model (LLM) training costs. • Rack densities and cooling requirements are rising due to AI.

• Emerging AI markets have seen significantly higher percentage based growth in AI-related employment and degree conferrals than established markets. • Recent college degree holders are moving on a net basis to more affordable metros in the Sunbelt, though there remains an inbound movement to high-priced markets.

• Renewable energy production varies across states. Texas produces the most. • Data center site selection is multifaceted and considers energy, climate, water, regulations, waste and community impact.

4

Commercial Real Estate Commercial Real Estate

5

Austin has temporarily heightened demand San Francisco Bay Area Still an AI Hotspot

AI Tenants in the Market

• Silicon Valley

accounts for more than half of AI tenant demand in the Bay Area.

3,000

2,456 KSF

2,500

• Austin’s figure is anomalous, as one tenant constitutes more than half of AI tenant demand in the market. • The 410,000 sf of

2,000

1,801 KSF

1,729 KSF

1,388 KSF

1,500

Thousands SF

979 KSF

1,000

video game tenants in the Los Angeles market are not included, even though they often utilize AI in their games.

500

292 KSF

0

Greater Los Angeles

DC Metro

Greater Seattle

New York City

Austin

SF-Bay Area

Source: Cushman & Wakefield Research, 2023 Note: San Francisco includes pre-OpenAI lease total

6

The San Francisco Bay Area is most evenly split AI TIMs Composition by Market Sub-Area

AI TIMs Composition by Market

1,305 KSF

1,400

1,151 KSF

1,200

1,000

900 KSF

800

600

488 KSF

448 KSF

Thousands SF

333 KSF

400

198 KSF

200

-

San Francisco

Silicon Valley

Seattle

Puget Sound-Eastside

Washington, DC

Southern Maryland

Northern Virginia

SF-Bay Area

Greater Seattle

DC Metro

Max Target SF

Source: Cushman & Wakefield Research, 2023 Note: San Francisco includes pre-OpenAI lease total

7

The San Francisco Bay Area has the largest tenants on average, anomalies excluded. Median and Average TIM Size by Market Sub-Area

AI TIMs Composition by Market

140

131 K

129 K

120

100

80

72 K

64 K

64 K

60 K

53 K

60

50 K

Thousands SF

46 K

41 K

40 K

37 K

35 K

33 K

40

30 K

28 K

25 K

24 K

23 K

20 K

15 K

20

6 K

-

Southern Maryland

Northern Virginia DC Metro

Washington, DC Silicon Valley San Francisco Austin (With Outlier)

Austin (No Outlier)

New York City Greater Los Angeles

Puget Sound Eastside

Seattle

SF-Bay Area

Austin

Greater Seattle

Median AI TIM Average AI TIM

Source: Cushman & Wakefield Research, 2023 Note: San Francisco includes pre-OpenAI lease total

8

Class A CBD vacancy highest in San Francisco Bay Area High Vacancy Presents Opportunity for AI Tenants

Class A CBD Vacancy Rates - AI Cities

• Pandemic shutdowns lead to higher vacancy rates in most, if not all, Class A CBD office markets in the United States. • High vacancy rates give tenants: – Negotiating power – Options – Flexibility – Reduced competition

35%

30%

29.6%

25%

21.7% 22.8% 23.6% 24.2%

20%

17.6%

15%

10%

5%

– Room for growth – Potentially lower operating costs

0%

New York City

DC Metro

Southern California

SF Bay Area

Greater Seattle

Austin

Source: Cushman & Wakefield Research, 2023

9

Premium Space Availability Highest on West Coast

DC, Austin and NYC top tier space show resilience

Top Tier Non Lease-Up CBD Vacancy Rates - AI Cities

22.7% 23.6% 23.4%

25%

20%

15%

13.3% 11.8% 13.1%

10%

5%

0%

New York City

DC Metro

Southern California

SF Bay Area

Greater Seattle

Austin

Source: Cushman & Wakefield Research, 2023

10

San Francisco Bay Area and New York City down significantly Leasing Activity Still Down from Pre-Pandemic Level

Overall Leasing Activity - AI Cities

• Pandemic shutdowns lead to much lower leasing activity in most, if not all, CBD office markets in the United States. • Low leasing activity gives tenants: – Negotiating power – Options – Flexibility – Reduced pressure – Room for growth – Potential for incentives and concessions

18

16

14

12

10

8

Millions (SF)

6

5.6 MSF 5.6 MSF

4

2.2 MSF 3.0 MSF 0.7 MSF 0.6 MSF

2

0

New York City

DC Metro

Los Angeles

SF Bay Area

Greater Seattle

Austin

Source: Cushman & Wakefield Research, 2023

11

AI Talent Landscape AI Talent Landscape

12

Number of job postings below post-March 2020 average, but above pre-pandemic average AI Talent Is in High Demand but Has Cooled Recently

Unique Monthly AI Job Postings (Trailing 4-Month Average)

• Demand for AI talent began increasing in 2021 after experiencing slight downward pressure from the pandemic. • A 10-month hiring spree began in • Job postings have cooled since July 2022 and now more closely resemble early-2021 figures. September 2021 and ran until June 2022.

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

5,550

3,800

Jul 2019

Jul 2020

Jul 2021

Jul 2022

Jul 2023

Apr 2020

Apr 2021

Apr 2022

Apr 2023

Apr 2019

Oct 2019

Oct 2020

Oct 2021

Oct 2022

Jan 2019

Jun 2019

Jan 2020

Jun 2020

Jan 2021

Jun 2021

Jan 2022

Jun 2022

Jan 2023

Jun 2023

Mar 2019

Mar 2020

Mar 2021

Mar 2022

Mar 2023

Feb 2019

Feb 2020

Feb 2021

Feb 2022

Feb 2023

Nov 2019

Dec 2019

Nov 2020

Dec 2020

Nov 2021

Dec 2021

Nov 2022

Dec 2022

Aug 2019

Sep 2019

Aug 2020

Sep 2020

Aug 2021

Sep 2021

Aug 2022

Sep 2022

Aug 2023

Sep 2023

May 2019

May 2020

May 2021

May 2022

May 2023

Unique Postings (Trailing 4-Month Average)

Post-March 2020 Average

Pre-Pandemic Average

Source: Cushman & Wakefield Research, Lightcast, 2023

13

Three California MSA’s appear in the top 10 MSA’s with the most job postings Washington, DC Leads the Pack for AI Job Postings

Unique Job Posting Concentration by MSA, 2018-2023 YTD

MSA’s With the Most Unique AI Job Postings, 2018-2023 YTD

Houston, TX Detroit, MI Minneapolis, MN Denver, CO Charlotte, NC Baltimore, MD Philadelphia, PA San Diego, CA Phoenix, AZ Austin, TX Atlanta, GA Chicago, IL Seattle, WA Dallas, TX Los Angeles, CA Boston, MA San Francisco, CA New York, NY San Jose, CA Washington, DC

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Source: Cushman & Wakefield Research, Lightcast, 2023

14

Despite hiring variances, top 5 states consistently absorb 37-40% of talent Hiring for AI-Related Occupations Trending Upward

Average Monthly Hires in AI Occupations by Year, 2018 - 2023

• California companies consistently hire more AI-related employees than companies in any other states. Hires are concentrated in San Francisco, Silicon Valley, Los Angeles and San Diego. primarily concentrated in the Texas Triangle: Dallas, Austin, Houston and San Antonio. • Texas hiring is

39.8%

40%

250,000

39.6%

39.5%

39.0%

39%

200,000

38.4%

38.1%

134,719

130,331

38%

150,000

129,258

115,729

115,088

109,196

37%

100,000

24,134 13,454 13,352 8,979

22,797 12,944 12,794 8,731

20,913 12,731 12,065 9,874

16,889 11,656 9,697 8,178

18,286 9,603 10,276 7,876

16,788 9,470 9,928 7,327

36%

50,000

29,144

28,796

28,226

27,567

24,827

24,663

35%

0

2018

2019

2020

2021

2022

2023

California Texas New York Florida Virginia All Other States Top 5 States Percent of Total

Source: Cushman & Wakefield Research, Lightcast, 2023

15

IT Consulting, hardware/software companies & consulting (broad) rank 1-3 MAMAA Companies Rank 4th in AI Job Postings

AI Job Postings by Industry Segment

AI Job Postings by Industry Sub-Segment

10,000 15,000 20,000 25,000 30,000 35,000

AI Job Postings by Industry Segment, 2018 – 2023 YTD

29.4

26.3

60,000

21.7

50,000

16.3

10.8

40,000

7.9

5.4

5.1

4.3

0 5,000

2.4 2.4 1.3

2.3 2.1

30,000

1.8

1.0 1.3

20,000

Government Banking

MAMAA

Telecom

10,000

Software

Hardware

Insurance

Recruiting

Automotive

IT Consulting

Cybersecurity

Health Insurance

0

Consulting (Broad)

Aerospace/Defense

Consulting Technology Gov't & Gov't Contractors

Financial Services

Healthcare Automotive

Artificial Intelligence

Healthcare Products

Hardware & Software Technology

Consulting

Gov't & Contractors

Fin Svcs

Health

Source: Cushman & Wakefield Research, Lightcast, 2023

16

Companies target AI employees skilled in AI, Machine Learning and Coding Software Devs and Data Scientists in High Demand

Occupations with the Most Unique AI Job Postings, 2018-2023 YTD

Most Desirable AI Skills from Job Postings, 2018-2023 YTD

Artificial Intelligence

Software Developers

Machine Learning

Data Scientists

Computer Science

Other Comp. Occupations

Python

Operations Research Analysts

Agile Methodology

Database Administrators

Java

Comp. Systems Analysts

Data Science

Web Developers

Database Architects

SQL

InfoSec Analysts

Software Engineering

Comp. and Info Rsch Scientists

Software Development

0 20 40 60 80 100 120

0 25 50 75 100 125 150 175 200 225

Thousands

Thousands

Source: Cushman & Wakefield Research, Lightcast, 2023

17

The 25 highest ranked programs are seeing a higher share of total completions than in the past Number of AI-Related Degrees Nearly Tripled from 2010

AI-Related Degree Completions, 2010-2021

Universities with most AI-related completions in 2021

80

16%

Univ. of Maryland Global Campus

14% 14% 13%

70

14%

13%

13% 13%

Univ. of Maryland-College Park

12% 12%

12%

11%

60

12%

USC

10% 11%

50

10%

Univ. of Illinois Urbana-Champaign

UC-Berkeley

40

8%

Thousands

Penn State

30

6%

UC-Irvine

20

4%

ASU

10

2%

Columbia

0

0%

UNC Chapel Hill

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

0 500 1,000 1,500 2,000 2,500

Total Completions Top 25 Total Completions Top 25 Percent of Total

Source: Cushman & Wakefield Research, Lightcast, 2023

18

The 25 highest ranked programs produce 3 in 10 AI-related PhD’s each year AI-Related PhD Completions Growing

Highly ranked universities with most AI-related completions in 2021 (all degree levels)

AI-Related PhD Completions, 2010-2021

34%

1,600

35%

33%

33%

32%

USC

31%

31%

30%

30%

29% 29%

1,400

28%

30%

28%

UC-Berkeley

1,200

Columbia

25%

1,000

Cornell

20%

M.I.T.

800

15%

Stanford

600

Carnegie Mellon

10%

400

UCLA

5%

200

Univ. of Chicago

0

0%

Duke

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 PhD Completions Top 25 PhD Completions Top 25 Percent of Total

0 200 400 600 800 1,000 1,200 1,400 1,600

Source: Cushman & Wakefield Research, Lightcast, 2023

19

AI Company Landscape

20

A quarter of the world's top 100 AI Companies Are Headquartered in California Global Top 100 AI Co. HQ’s Concentrated in California

• Of the global top 100 AI companies, 65 are based across 15 U.S. states. • Cities in California with the most HQs include San Francisco (6), Palo Alto (3), Santa Clara (3), San Jose (2) and Campbell (2). • Of the nine AI companies headquartered in Texas, seven are in the Austin area.

Source: Cushman & Wakefield Research, Pitchbook, 2023

21

Horizontal platforms spending expected to grow 28% annually Vertical Platforms Expected to Grow 31% Annually

Horizontal Platforms – Total Spending ($B)

Vertical Platforms – Total Spending ($B)

$70

$70

50%

50%

44%

$60

$60

40%

40%

34%

$50

37%

32%

$50

30%

32%

30%

28%

30%

30%

$40

26%

$40

25% 28%

$30

20%

$30

20%

$20

$20

10%

10%

$10

$10

$-

0%

$-

0%

AI automation platforms*

AI core software Computer vision*Natural language technology* 2022 2025 CAGR

2022 2025 CAGR

Source: Cushman & Wakefield Research, Pitchbook, 2023

22

Autonomous machines spending expected to grow 12.3% annually AI Semiconductors Expected to Grow 19% Annually

AI Semiconductors – Total Spending ($B)

Autonomous Machines – Total Spending ($B)

45%

45%

$60

$60

40%

39%

40%

40%

$50

$50

35%

35%

30%

30%

$40

$40

25%

25%

22%

$30

$30

20%

20%

15%

15%

15%

15%

$20

$20

10%

10%

5%

$10

$10

5%

5%

0%

0%

$-

$-

GPU

FPGA Microcontroller

ASIC

Autonomous Vehicles

Intelligent Robotics & Drones

2022 2025 CAGR

2022 2025 CAGR

Source: Cushman & Wakefield Research, Pitchbook, 2023

23

Deal value and deal counts down after historic 2021 peak as high interest rates & economic uncertainty set in Venture Capital Activity Lower After 2021 High

Semiconductor Venture Capital Deal Activity

Autonomous Machines Venture Capital Deal Activity

500

500

$18,000

$18,000

458

$16,000

$16,000

416

400

400

$14,000

$14,000

386

341

340

316

311

$12,000

$12,000

316

284

300

300

$10,000

$10,000

249

271

$8,000

$8,000

188

200

200

175

$6,000

$6,000

129

104

$4,000

$4,000

76

75 100

67 100

60

52

$2,000

$2,000

23 27

11 22

$0

$0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 23Q1 Deal value ($M) Deal count (R)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 23Q1 Deal value ($M) Deal count (R)

Source: Cushman & Wakefield Research, Pitchbook, 2023

24

Data Centers

25

Semiconductors

Key Points

• Semiconductors address two crucial phases of the AI lifecycle: training and inference. In training, AI chips process vast amounts of existing data and perform complex calculations. In the inference phase, AI chips are used to make inferences on the data on which they’ve been trained. • Speed, efficiency and energy usage are top concerns for AI chip manufacturers. • The leading AI chip makers, by performance, are Nvidia, AMD, Intel and, most recently, Amazon AWS.

26

Overall semiconductor market grew 31% from 2020-2022 Long-Term Semiconductor Market Growth Expected

Semiconductor market size worldwide 2020-2030, by application

• By 2030, the leading application within the global semiconductor industry is expected to be servers, data centers and storage. • In 2020, the servers, data center and

1,200

1,000

249

82

800

160

136

600

79 93 93 62

100

149

71 63 73 53

storage market was valued at $76 billion, and it is expected to increase by 227% by 2030.

50 40 51 38 76

400

114

131

124

200

115

117 100

213

150

144

0 Worldwide Market Revenue (in billion USD)

2020

2022

2025*

2030*

Smartphone Automotive

Personal computing Industrial electronics

Consumer electronics

Wired and wireless infrastructure

Servers, data centers, and storage

Note: * denotes forecasted figure

Source: Cushman & Wakefield Research, ASML, 2023

27

Idaho, Utah and Nebraska offer commercial power under 9¢ Least Expensive States for Commercial Power

15 Cheapest States by Avg. Commercial Electricity Cost

12

11

10.41¢

10.25¢ 10.31¢

9.89¢

9.85¢

9.66¢

10

9.36¢

9.36¢

9.27¢

9.05¢

8.89¢

9.59¢

9.52¢

9

8.45¢

8.32¢

8.78¢

8

8.39¢

8.14¢

8.10¢

7

7.43¢

7.32¢

7.29¢

7.12¢

7.01¢

6.97¢

6.94¢

6.92¢

6.76¢

6.57¢

6

Average Price of Electricity (¢/kWh)

6.12¢

5

Idaho

Utah Nebraska North Dakota

North Carolina

Oregon Texas Wyoming Washington Virginia Missouri

Nevada South Dakota

Arkansas Oklahoma

Commercial (¢/kWh)

Industrial (¢/kWh)

Source: Cushman & Wakefield Research, FindEnergy.com, 2023

28

Open AI’s GPT-3 used more power than other leading models to train Large Language Models Use a lot of Power to Train

Energy consumption when training LLMs in 2022 (in MWh)

• Energy consumption in training is high; frequent retraining is required to maintain data relevance. Lifetime energy consumption is even higher than initial training usage. • Energy savings from

1,400

1,200

1,000

800

600

AI will be big. Mobile phone operators alone expect AI to reduce power consumption by 10-15%.

MWh Used in Training

400

200

0

GPT-3

Gopher

Bloom

OPT

Note: San Francisco includes pre-OpenAI lease total

Source: Cushman & Wakefield Research, Cornell University, 2023

29

Ranges from $107k to $530k Hypothetical Electricity Cost to Train GPT-3 by State

• GPT-3 is estimated to have used 1,287 megawatt hours of electricity during training. • The estimated cost to train GPT-3 varies by state based on average commercial electricity rates. • Training is not latency dependent, LLM operators can harvest significant savings in low-cost energy states.

Source: Cushman & Wakefield Research, FindEnergy.com, Cornell University, 2023

30

Hyperscaler and colocation providers offer greater PUE than those running older technology Power Usage Effectiveness Gaining Greater Efficiency

Innovations Most Likely To Deliver Better Data Center Efficiency Worldwide, 2022-2027

Data Center Average Annual PUE Worldwide

2.7

Software-defined power

50%

Artificial intelligence

45%

2.5

2.5

Multisite resiliency

38%

2.3

Fuel cells for primary power generation Transactive relationship w/ utility provider Direct liquid cooling

36%

23%

2.1

1.98

17%

1.9

Multiday battery storage

15%

Heat rejection into water

10%

1.67

1.65

1.7

1.59 1.57

Power Usage Effectiveness (PUE) Ratio

1.58

Metaverses

8%

1.55

Other

5%

1.5

0% 10% 20% 30% 40% 50% 60%

Source: Cushman & Wakefield Research, Uptime Institute, 2023 Note (rhs): Survey of 744 IT and Data Center managers worldwide in 2022

31

Data center developers have seen density and cooling expectations rise Rack Densities Increasing with Compute Requirements

New Project Est. Rack Density Ranges (kW per Rack)

• Both CPU and GPU oriented data centers are requiring higher densities • Cooling requirements

140

120

100

will likewise need to increase as higher densities lead to higher temperatures. Expect liquid-to-chip cooling to become more commonplace, with many current plans designed to be

80

60

40

20

flexible between different cooling regimes.

0

2021

2022

2023

2024

2025

Source: Cushman & Wakefield Research, estimates based on discussions with data center developers and operators

32

Demographics & Emerging Markets

33

AI-Related jobs grew by 33% on average in the markets outlined below Established AI Hubs Seeing Long-Term Job Growth

AI-Related Jobs & Growth In Established Markets

450

120%

104%

400

100%

350

300

80%

65%

65%

250

60%

51%

200

Thousands

150

40%

28%

25%

21%

100

17%

15%

20%

11%

50

0

0%

New York City Washington, DC Los Angeles San Francisco

Seattle San Jose/Silicon Valley

Chicago

Boston

Philadelphia

Austin

2012 Jobs 2023 Jobs 2012 - 2023 % Change

Source: Cushman & Wakefield Research, Lightcast, 2023

34

Emerging Markets Primarily Located in The Sunbelt

With the exception of Portland and Salt Lake City

AI-Related Jobs & Growth In Emerging Markets

94%

250

100%

84%

90%

81%

200

80%

66%

70%

63%

61%

57%

150

60%

51%

49%

45%

50%

Thousands

100

40%

30%

30%

50

20%

10%

0

0%

Dallas/Fort Worth

Atlanta Denver/Boulder

Phoenix

Houston

Miami

Raleigh/Durham Salt Lake City/Provo

Portland

Charlotte

Nashville

2012 Jobs 2023 Jobs 2012 - 2023 % Change

Source: Cushman & Wakefield Research, Lightcast, 2023

35

All emerging markets have seen significant growth in AI-related degree completions Emerging Markets Typically Investing In Education

AI-Related Degree Completions in Emerging Markets, 2012 - 2021

1,800

600%

564%

1,600

500%

1,400

428%

400%

1,200

1,000

321%

272%

300%

294%

800

164%

205%

200%

600

183%

132%

400

65%

100%

200

0%

0

Dallas/Fort Worth Atlanta

Denver/Boulder

Phoenix

Houston Raleigh/Durham Salt Lake City/Provo

Portland

Charlotte

Nashville

All Completions - 2012 All Completions - 2021 % Change in Completions

Source: Cushman & Wakefield Research, Lightcast, 2023

36

Emerging Markets Offer Model Training Savings

Estimated Electric Cost to Train GPT-3 in Emerging Market States

180

18.00

160

16.00

140

14.00

12.98¢

12.74¢

12.20¢

11.75¢

120

12.00

10.82¢

9.36¢

9.36¢

9.27¢

100

10.00

8.45¢

80

8.00

60

6.00

40

4.00

Average Cost of Electricity per KWh (¢)

20

2.00

Estimated Electric Cost to Train GPT-3 ($000's)

$164K

$157K

$151K

$139K

$120K

$120K

$119K

$109K

$167K

-

-

Georgia

Tennessee

Colorado

Arizona

Oregon

Texas

North Carolina

Utah

U.S. Average

Total Electricity Cost to Train GPT-3

Commercial (¢/kWh)

Source: Cushman & Wakefield Research, Statista, FindEnergy, 2023

37

Future Trends & Considerations

38

Washington tops the chart for large production states Top 10 States by Renewable Production Mix

Top 10 States by Percent of Renewable Energy Production

• The majority of Washington’s

250

120%

renewable energy production comes from conventional hydroelectric production. • Solar, conventional

99.6%

100%

200

83%

80%

72% 71%

67% 65%

150

62%

60%

50%

hydroelectric, and wind account are major sources of renewable electricity production in California.

46% 45%

100

40%

50

20%

Energy Production - Millions (KWh)

Renewable Energy Percent of Total

0

0%

Vermont

South Dakota

Washington Idaho

Maine

Oregon

Iowa

Montana Kansas California

Renewable Production (MWh)

Non-Renewable Production (MWh)

Renewable % of Total

Source: Cushman & Wakefield Research, FindEnergy.com, 2023

39

It isn’t even close Texas is #1 in Total Renewable Energy Production

Top 10 States by Total Renewable Energy Production

• Renewable production in Texas is higher than the total production in 44 U.S. states combined. • Wind and solar are the prominent renewable energy sources in The Lone Star State. • NRG, Austin Energy, and CPS Energy’s South Texas Project produces more power than the total of 10 other states.

600

80%

72%

65%

70%

62%

500

60%

400

46%

45%

50%

44%

300

35%

40%

29%

27%

30%

200

20%

14%

13%

Energy Production - Millions (KWh)

Renewable Energy Percent of Total

100

10%

0

0%

Texas California Washington Iowa Oregon Oklahoma New York Kansas Illinois Colorado North Carolina

Renewable Production (MWh)

Non-Renewable Production (MWh)

Renewable % of Total

Source: Cushman & Wakefield Research, FindEnergy.com, 2023

40

Environmental Considerations in Data Center Site Selection

Water Availability & Conservation

Energy Efficiency & Renewables

Climate Resilience

• Prioritize locations with access to reliable and affordable renewable energy sources. • Look for regions with a robust grid infrastructure and proximity

• Assess susceptibility to natural disasters and select sites with lower risk profiles. • Consider climate change projections to ensure long-term viability and resilience.

• Evaluate water availability and potential restrictions, especially in arid or drought-prone areas. • Implement water-efficient cooling systems and explore reuse/recycling options.

to renewable energy generation facilities.

Regulatory Compliance & Sustainability Standards

Community Engagement & Stakeholder Relations

Waste Management & Recycling

• Ensure compliance with local, state and federal environmental regulations and codes. • Seek locations with established sustainability standards to align with industry best practices.

• Seek areas with robust waste management infrastructure and recycling programs to minimize environmental impact. • Consider opportunities for repurposing or recycling data center components and materials.

• Engage local communities to address concerns and demonstrate a commitment to environmental responsibility. • Consider partnerships with local organizations or initiatives focused on sustainability and environmental conservation.

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Methodology

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Glossary of Key Terms

Term

Definition

Term

Definition

AI

Artificial Intelligence

KSF

Thousand Square Feet

An integrated circuit that is dedicated to training and executing neural networks

AI Chips

kWh

Kilowatt-hour

MSA

Metropolitan Statistical Area

A free large language model for large-scale public access created by AI researchers from HuggingFace, Microsoft, Nvidia, IDRIS/GENCI and PyTorch

Bloom

MSF

Million Square Feet

MWh

Megawatt-hour

CBD

Central Business District

Open Pre-Trained Transformer developed by Meta for natural language processing researchers

OPT

A measure of computational resources required for AI systems to perform tasks Synthetic media that’s been digitally manipulated to replace one person's likeness with that of another A 280 billion parameter large language model developed by Google subsidiary DeepMind Generative Pre-Trained Transformer 3; a large language model released by OpenAI in 2020

Compute

Power Usage Effectiveness: ratio measuring energy used by a data center to the energy delivered to computing equipment in the data center

Deepfake

PUE

Gopher

TIMs

Tenants in the Market

GPT-3

Companies involved in vertical applications, horizontal platforms, autonomous machines or AI & ML semiconductors, as rated by Pitchbook.

AI Company

GPU

Graphics Processing Unit

YTD

Year-to-date

IT

Information Technology

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Occupations & Universities included in survey results Job Postings Parameters

Occupations Analyzed

Highest Ranked AI-Related Universities

• Computer And Information Research Scientists • Computer And Information Systems Managers • Computer Hardware Engineers • Computer Network Architects • Computer Occupations, All Other • Computer Programmers • Computer Systems Analysts • Computer User Support Specialists • Database Administrators • Database Architects • Data Scientists • Information Security Analysts • Network And Computer Systems Administrators • Operations Research Analysts

• University of

• California Institute Of Technology • University Of California-Berkeley • University Of California-Los Angeles • Harvey Mudd College • University Of Southern California • Yale • Georgia Institute of Technology-main Campus • University of Chicago • Northwestern University • Harvard • M.I.T. • Northeastern University

Michigan-Ann Arbor • Dartmouth College • Princeton • Columbia University • Cornell • Duke • Carnegie Mellon • University of Pennsylvania • Brown University • Vanderbilt University • Rice University • The University of Texas at Austin • Stanford

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John McWilliams Senior Research Analyst john.mcwilliams@cushwake.com

Kevin Waldman Executive Director kevin.waldman@cushwake.com

Jacob Albers Head of Alternatives Insights jacob.albers@cushwake.com

David C. Smith Head of Americas Insights david.smith4@cushwake.com

About Cushman & Wakefield Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 52,000 employees in over 400 offices and approximately 60 countries. In 2022, the firm had revenue of $10.1 billion across core services of property, facilities and project management, leasing, capital markets, and valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

©2023 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.

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