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Data Centers Affect RE Values-Why Do They Require So Much Energy?

By
Real Estate Technology with http://www.medicalandspaconsulting.com

It certainly seems that data centers can supress values in areas where they are located. Thet do provide high paying jobs but they also consume a lot of eberfy for cooling and performance. Many have asked me why this occurs (power consumption).

The answer is predictably complex. AI chips are far more powerful than even recent chip iterations. The reason is that tens of MILLIONS of bit must pass through them EVERY second. Copper in't the answer since it cannot handle the heat this process generates. Consequently, the current answer to this issue is to send more and more power to the chips to keep providing energy so that the chips can regenerate over and overagain as the chips degrade,   It is analgous to a dog chasing its tail. 

I am optimistic that there will be a solution.  I have worked with light in my professional career. Consequently, light may be the answer since photons (particles of light) can almost  endlessly transmit energy and it does so very efficiently. 

Light does not generate heat and it is the heat (and resulting need for cooling) that drains energy. 

I often comment that heat and sound can be very beneficial or very destructive depending upon the goal and frequency.

Posted by

Paddy Deighan JD PhD

Comments(5)

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GilbertRealtor BillSalvatore
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

good post with great information. Thanks for sharing it. Bill

Have a fantastic week!

Bill Salvatore, Realtor- Arizona Elite Properties

Jun 22, 2026 03:17 AM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Good morning Paddy. Your posts are very educational for those of us trying to grasp the AI revolution both the positives and the negatives. Thanks! Enjoy your day.

Jun 22, 2026 05:29 AM
Gwen Fowler SC Lakes & Mountains 864-710-4518
Gwen Fowler Real Estate, Inc - Walhalla, SC
Gwen Fowler Real Estate, Inc.

Paddy, this is a fascinating and incredibly forward-thinking perspective on the infrastructure side of AI.

The "dog chasing its tail" analogy is a perfect description of the current loop we are in with power consumption and chip degradation. While the conversation in the real estate industry is usually focused on the surface-level impacts of data centers—like local grid strain or the suppression of immediate residential property values—you’ve done a wonderful job breaking down the deep technological bottleneck causing it.

Your optimism about photonics and light-based computing is really intriguing. If we can successfully transition from heat-generating copper and high-voltage power to efficient, heat-free optical transmission, it would completely change the footprint of these facilities and dramatically reduce their impact on local environments and utility grids.

Thank you for always bringing such educational, high-level insights to the platform!

Jun 22, 2026 05:45 AM
Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

It is good to see Intel making a comeback (thank you President Trump). I think we will look back in 10 years at the American real estate landscape and have trouble recognizing it. 

Jun 22, 2026 06:11 AM
Anna "Banana" Kruchten
Retired Broker/Owner - Phoenix, AZ
602-380-4886

It's interesting Paddy that I just heard on a business show this morning that this whole idea of these centers consuming so much energy is overblown. One example given was golf coursed.  Think of all the water it takes to maintain a golf course.  And lord knows Phoenix has a tone of those and has for years.   

Jun 22, 2026 10:57 AM