This January, New York City took one of its first major steps toward its goal of becoming a global leader in applied artificial intelligence (AI). On the 31st, city representatives published New York City’s Artificial Intelligence Advantage: Driving Economic Growth and Technological Transformation—a detailed, 40-plus-page report on the city’s plans for an AI-driven future. The city-backed plan lays out 18 key initiatives, including a $3 million investment to launch an “AI Nexus”—a first-of-its-kind hub designed to empower, enable, and connect startups and enterprises in the development and adoption of practical AI solutions.
While $3 million is a modest sum in the grand scheme of things (and especially in today’s frenzied AI investment landscape) the funds carry significance. Most importantly, it is a public declaration of the city’s commitment to fostering a thriving AI ecosystem. But how can NYC square this relatively minor investment with its rather ambitious vision to solidify its position as a global AI hub?
How and Why NYC Can Bring its Bold AI Vision to Life
Thankfully for New York, it already has most if not all of the most important raw ingredients needed for applied AI supremacy: a large and well-established tech ecosystem, strong venture capital presence, and a talent pool second only to perhaps Silicon Valley. As the second largest tech startup ecosystem in the world, New York City is home to over 25,000 active startups, over 360,000 tech sector employees, and over 1,200 venture capital firms eager to invest in innovative young tech companies.
The latter holds particularly true for companies launching in the AI space. In fact, in 2023 alone, roughly a third of all VC dollars were directed toward AI startups—a preference which has undoubtedly helped fuel New York’s eye-popping sum of over 2,000 AI startups currently operating within the city limits.
Finally, and perhaps most importantly, the greater New York City metro area is currently home to over 40,000 professionals with AI skills. As one of the greatest hindrances to AI innovation today, the fact that New York has already largely overcome its AI skills gap is of tremendous significance when determining the likelihood of its success.
Considering all of the above, New York City is most likely already better positioned to thrive in the age of AI than 99% of the world’s cities—$3 million investment or not. However, translating all of these advantages into a world-leading AI hub requires more than just talent and funding—it requires infrastructure. The development, training, and implementation of AI is highly data and compute-intensive, demanding large amounts of powerful technologies and seamless connectivity. This is where data centers (and their ilk) come in; and they will play a crucial role in realizing NYC’s vision for an applied AI utopia.
The Critical Role of Data Centers and Interconnection Facilities in NYC’s AI Success
According to Goldman Sachs, AI is poised to drive a 160% increase in data center power demand by 2030. As a result, the same researchers concluded that data centers will soon account for over 8% of the U.S.’s entire energy usage. When presented with such stats, most people assume the only logical conclusion is to start building a whole lot more data centers. However, this isn’t the only viable approach (and more importantly, it often isn’t the best either).
New data center build-outs are difficult, time-consuming, and most of all, expensive. This is especially true in a place like New York City, where space is scarce, rent is high, real estate is exorbitant, and energy infrastructure is 20+ years old.
The good news is, NYC’s applied AI ambitions can be served by other types of data infrastructure. Rather than needing to build entirely new infrastructure, NYC can leverage its existing network of data centers and interconnection facilities to support the next generation of AI applications. The AI Nexus and its growing ecosystem will require high-performance computing, ultra-low latency connectivity, and scalable infrastructure—all of which urban data centers in the metro area can provide.
Unlike traditional data storage solutions, AI-driven companies require interconnection facilities that enable rapid, reliable, and cost-effective data exchange. The ability to train, test, and deploy AI models at scale depends on access to high-performance computing environments that are well-connected within the city’s broader digital ecosystem.
The DataVerge Difference: Why We’re Built to Serve New York City’s Big Ambitions
At DataVerge, we offer carrier-neutral interconnection facilities that provide AI startups with a cost-effective, scalable alternative to traditional data centers. Our materials and equipment offer unparalleled performance and reliability, while our ever-expanding network of partnerships and physical connections ensures seamless implementation, ultra-low latency and unmatched uptime—key requirements for AI-driven workloads.
As AI models grow in complexity and demand for computing power rises, companies in New York need data centers that can support their evolving needs without the high costs and logistical challenges of new build-outs. DataVerge is already positioned to serve as the digital backbone of New York’s AI future.
Learn more about how DataVerge is helping build out the backbone of New York’s AI future, here.
