January 24th, 2025
“Our intuition about the future is linear. But the reality of information technology is exponential, and that makes a profound difference. If I take 30 steps linearly, I get to 30. If I take 30 steps exponentially, I get to a billion.”
- Ray Kurzweil
Little over a year ago, early adopters, marketing gurus, and ‘tech bros’ were expounding upon the abilities of the first generative AI LLM models’ ability to write their social media content for them.
At the time, it was a gamechanger.
Fast forward to today and just about everybody is using some form of AI in order to work, live, and play. From college students writing term papers and lawyers drafting legal cases to bankers underwriting assets and marketing teams rolling out massive campaigns in a fraction of the time, one thing has been abundantly clear.
Although there are shortcomings to AI and while a trained human is still your best bet, those who do not engage or collaborate with AI-based tools will be quickly left behind by those who do.
What’s even scarier is the rapid and exponential pace of improvement. Not only are AI models themselves becoming eerily capable of completing tasks, but the hardware and software components are also making quantum leaps thanks to companies such as NVIDIA.
With AI agents now coming to the forefront, both the private and public sectors are waking up to the realization that we are in an “AI arms race” and are moving quickly to develop assets such as data centres and manufacturing facilities for semiconductors and specialized components for data transfer, cooling, photolithography, edge AI hardware, and neural processing units.
This entire ecosystem surrounding AI is just taking off and, with the exponential growth we are experiencing, nobody knows where this will take us collectively in the coming decade.
That all said, one constant remains: real estate. In order to scale these initiatives it will require a tremendous amount of land and high-tech industrial space.
That is why, for this week’s newsletter, we will dive deeper into data centres, as well as one of the latest and biggest announcements in the world of AI: Project Stargate.
Understanding Data Centres: The Backbone of the Digital World

A data centre is a dedicated facility designed to house computer systems, servers, and related components for storing, managing, and processing vast amounts of data. These centres serve as the operational hubs for cloud computing, internet services, and large-scale data storage. They enable companies, governments, and organizations to ensure uninterrupted data access, secure storage, and efficient processing.
Data centres come in various sizes, from small server rooms to sprawling facilities that cover thousands of square feet, often referred to as hyperscale data centres. They are essential for powering everything from email and online shopping to streaming services and real-time financial transactions.
The Anatomy of a Data Centre

NVIDIA Unveils Digital Blueprint for Building Next-Gen Data Centers. Source: NVIDIA.
Data centres are meticulously designed systems comprising several critical components:
- Servers: The core of the data centre, these machines store and process data. They vary in type, such as application servers, database servers, and storage servers.
- Networking Equipment: Routers, switches, and firewalls ensure seamless connectivity between servers, users, and the internet.
- Power Systems: Redundant power supplies, generators, and uninterruptible power supplies (UPS) keep operations running without interruptions.
- Cooling Infrastructure: Data centres generate immense heat, requiring advanced HVAC systems, liquid cooling, or evaporative cooling systems to maintain optimal temperatures.
- Storage Systems: Includes hard drives and SSDs to handle the massive influx of data. Modern centres often rely on network-attached storage (NAS) and storage area networks (SAN).
- Security Systems: Physical (e.g., biometric access control) and digital (e.g., firewalls and encryption) security measures protect sensitive data.
- Backup and Recovery Systems: Ensure data is preserved in case of hardware failure or cyberattacks.
Why Data Centres Are Crucial to AI and Quantum Computing
Data centres are integral to advancing artificial intelligence (AI) and quantum computing by providing the infrastructure needed for complex computation and vast data storage.

Elon Musk’s massive xAI data center gets approved for 150MW of power, enabling all 100,000 GPUs to run concurrently. Source: Tom’s Hardware.
- Artificial Intelligence: AI models, especially those involving machine learning and deep learning, require immense computational power and access to large datasets. Data centres provide the high-performance GPUs, TPUs, and server clusters needed to train and deploy these models. For example, companies like OpenAI and Google rely on hyperscale data centres to power their AI tools.
- Quantum Computing: Quantum computers, which leverage the principles of quantum mechanics, are highly experimental but promise transformative computational power. Data centres can host quantum computing hardware alongside traditional systems, offering the advanced cooling, power, and connectivity needed for quantum experiments. As quantum computers evolve, data centres will play a vital role in integrating quantum systems with classical IT infrastructure.
Data centres are the backbone of the digital age, enabling cutting-edge technologies to thrive. They are not just repositories for data but critical enablers of innovation, making them indispensable in our increasingly interconnected world.
Project Stargate – Elevating AI Capabilities
Stargate: The Movie (1994). Source: GameRant.
The Stargate Project, announced on January 21, 2025, is a significant artificial intelligence (AI) infrastructure initiative led by President Donald Trump, in collaboration with OpenAI, SoftBank, Oracle, and the Abu Dhabi state AI fund MGX. The project aims to invest up to $500 billion over the next four years to bolster AI capabilities in the United States.
Key Objectives and Partners
The primary goal of the Stargate Project is to establish a robust AI infrastructure to support OpenAI’s advancements, particularly in developing technologies like ChatGPT. The initiative is expected to create hundreds of thousands of jobs and accelerate the development of AI applications, including potential breakthroughs in healthcare such as cancer detection and treatment.
The founding partners of the project include:
- OpenAI: A leading AI research organization known for developing advanced AI models.
- SoftBank: A Japanese multinational conglomerate with significant investments in technology.
- Oracle: A multinational computer technology corporation specializing in database software and technology.
- MGX: The AI fund backed by the government of Abu Dhabi.
Inside a Microsoft data center. Source: CNET.
Financial Commitment and Structure
The project plans to deploy $100 billion immediately, with the total investment potentially reaching $500 billion over the next four years. SoftBank and OpenAI are expected to contribute more than $15 billion each. The funding will be raised through a combination of equity from existing backers and debt. The operational and financial aspects of the project will be managed separately, with OpenAI overseeing operations and SoftBank handling financial responsibilities.
Infrastructure Development
Construction of the first data center is underway in Abilene, Texas, with plans for additional facilities across the country. The project aims to provide the necessary data and computing power to overcome current bottlenecks in AI development. This initiative is expected to enhance the United States’ competitive edge in AI technology, particularly in relation to global competitors like China.
Potential Impact
The Stargate Project is anticipated to have a profound impact on various sectors, especially healthcare and research, by creating numerous jobs and accelerating disease cures. The initiative highlights the importance of digital infrastructure and power accessibility, benefiting related industries like data centers, copper mining, and energy trading.
While the project has garnered significant attention and support, some skepticism remains regarding its ambitious financial goals and the feasibility of achieving them. However, the collaboration among major tech companies and the substantial investment underscores a strong commitment to advancing AI infrastructure in the United States.
Conclusion:
In conclusion, Project Stargate represents a bold leap forward in the development of AI infrastructure, with the potential to revolutionize industries such as healthcare and technology.
By mobilizing substantial investments and fostering collaboration among key players in the tech world, the initiative aims to solidify the United States’ leadership in the global AI race.
While challenges remain, the project’s ambitious scope and the promise of transformative advancements make it a critical milestone in the evolution of artificial intelligence.
As AI continues to shape our future, projects like Stargate highlight its growing influence in driving innovation and addressing some of the world’s most pressing challenges.
In the meantime, for a (non-AI) confidential consultation or a complimentary opinion of value of your property please give us a call.
Until next week…
Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 30 years.
Goran Brelih is an Executive Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.
Over the past 30 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.
Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development
About Cushman & Wakefield ULC.
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 53,000 employees in 400 offices and 60 countries.
In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.
For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.
Connect with Me Here! – Goran Brelih’s Linkedin Profile: https://ca.linkedin.com/in/goranbrelih
Goran Brelih, SIOR
Executive Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
www.cushmanwakefield.com
Office: 416-756-5456
Mobile: 416-458-4264
Mail: goran.brelih@cushwake.com
Website: www.goranbrelih.com