The data center industry is spearheading a new phase of technological growth. Infrastructure strategy is being rewritten due to artificial intelligence (AI) becoming a daily business tool, organizations demanding faster access to data, and power constraints challenging expansion plans.
2026 represents both opportunity and urgency to rethink how capacity, connectivity, and resiliency are delivered for data center operators and tenants alike. The next phase of data center growth will be driven by powerful shifts that transform how data centers are built, powered, and connected.
AI-Native and High-Performance Infrastructure Takes the Lead
The AI boom is transforming data center design from the ground up. Training and running advanced AI models requires high-performance computing (HPC) environments built for dense power draw, low latency, and rapid data movement.
The Wall Street brokerage sees AI capex across hyperscalers to reach $490 billion by the end of 2026. This will be largely driven by investments in accelerated computing infrastructure. These AI-optimized facilities are deploying higher power density racks, supported by custom GPU and TPU clusters.
For tenants, this shift means that power density and connectivity will define competitiveness. Data-heavy workloads require access to robust power and fiber capacity – resources that are becoming increasingly scarce in major markets. As developers struggle to find new power sources, established hubs with both massive and available capacity become invaluable. 165 Halsey Street is a prime example of a ‘power-rich’ and ‘space-available’ hub in the critical NY/NJ market.
AI infrastructure is also changing network design. Operators are implementing high-speed interconnects and next-generation switching fabric to minimize bottlenecks and latency between compute nodes. For both on-premises AI workloads and regional cloud expansions, reliable, scalable interconnection is proving just as vital as compute power itself.
The Edge Expands: Distributed Architectures Redefine Proximity
The demand for speed is no longer about bandwidth alone, it’s about location. As organizations deploy more sensors, IoT devices, and real-time analytics, they need to process and act on data closer to where it’s generated. This shift is accelerating the adoption of edge and distributed architectures.
The global edge data-center market is projected to exceed $300 billion by 2026, as industries such as government, healthcare, and Fortune 500 companies look to support low-latency applications and data-driven automation. Instead of relying solely on massive, centralized data centers, companies are building distributed networks of smaller, interconnected facilities that operate closer to end users.
For data center customers, this evolution offers new flexibility. By pairing hyperscale capacity with strategically located sites, organizations can improve performance, reduce backhaul costs, and build greater resilience into their digital ecosystems.
165 Halsey Street sits at the nexus of this distributed network, serving as a key aggregation hub that connects edge deployments, cloud regions, and enterprise networks throughout the Northeast. With direct access to hundreds of carriers and network providers, the facility enables seamless interconnection between edge nodes and core infrastructure, reducing latency and improving the efficiency of data exchange across regions.
Power Constraints Reshape Expansion Plans
As demand for digital infrastructure continues to rise, power availability is becoming an increasingly critical concern for the industry.
Across major data-center markets, grid capacity is tightening. Connection wait times in some regions now extend several years, forcing operators to explore secondary markets and rethink site selection strategies. Reliable, readily available power is now one of the most important factors influencing where and how new facilities are developed.
For tenants and partners, these constraints underscore the importance of collaboration and long-term planning. Power and space will continue to be valuable resources in high-demand markets. Partnering with established, well-connected facilities ensures the scalability and stability needed to support future workloads, especially those tied to AI and edge applications that require significant, sustained power.
Preparing for the Future
In 2026, the data center is no longer just a physical space, it’s the foundation of global innovation. AI is redefining performance standards. Edge computing is redrawing the map of data distribution, power constraints are influencing where and how the next generation of infrastructure is built.
For enterprises, service providers, and network operators, staying ahead means aligning strategy with these shifts ensuring your infrastructure is ready not only for today’s workloads, but for tomorrow’s accelerated, distributed, and data-intensive future.
At 165 Halsey Street, connectivity, reliability, and access to robust power are central to that readiness. As the industry evolves, so too does the importance of choosing colocation environments that can grow, adapt, and perform in step with these trends. Explore how 165 Halsey supports modern data management with more than 1,650 cabinets offering unmatched data center availability. Contact us today!