The AI revolution is reshaping commercial real estate across America, and Northeast Ohio just joined the party. OpenAI’s recent announcement of a $400 billion investment in five new U.S. data center sites, including a major investment at the former GM plant in Lordstown, Ohio, shows how the region could become a critical hub for AI infrastructure development.
The Stargate Project
On September 23, 2024, OpenAI, Oracle, and SoftBank revealed plans for the largest AI infrastructure investment in U.S. history. The Lordstown facility, developed in partnership with SoftBank, represents part of a 1.5-gigawatt initial capacity rollout expected to be operational in the coming years. A single gigawatt equals the capacity of one nuclear reactor, making this development a substantial addition to Ohio’s digital infrastructure landscape.
This investment is part of OpenAI’s broader Stargate initiative, aimed at delivering $500 billion in domestic data centers and AI infrastructure over the next four years. The selection of Lordstown signals Northeast Ohio’s emergence as a potential location for more hyperscale AI facilities.
The AI-Driven Data Center Surge
The numbers behind the AI boom are impressive. OpenAI’s ChatGPT alone now has 700 million users weekly, requiring a lot of computing power. This surge is driven by several key factors:
Generative AI Demands: AI applications require 10-20 times more computing power than traditional search queries, creating massive infrastructure needs for tech giants.
Scale Requirements: As OpenAI CEO Sam Altman stated at the announcement, “We will push on infrastructure as hard as we can because that is what will drive our ability to deliver amazing technology and basic products and services.”
Collaboration Necessity: Oracle’s newly named co-CEO Clay Magouyrk emphasized that “the work that we have to do is not possible for any one entity, for any one company, to do on its own.”
Market Competition: Tech giants including Meta, Alphabet, Amazon, and Microsoft are expected to spend over $344 billion this year on data center infrastructure to support AI development.
Why Northeast Ohio?
The selection of Lordstown wasn’t accidental. Northeast Ohio offers compelling advantages that made it attractive to one of the world’s most valuable AI companies:
Strategic Location: Lordstown’s position provides access to major population centers while offering the space and infrastructure needed for hyperscale development. Additionally, hyperscalers are already active in the Columbus market, making Lordstown a good fit given its proximity and being located in the same state.
Existing Infrastructure: The former General Motors plant site in Lordstown already has substantial utility infrastructure and transportation access.
Power Availability: Ohio’s diverse energy portfolio and grid stability can support the massive power requirements of AI data centers.
Economic Development Support: The state’s aggressive approach to data center incentives and streamlined permitting processes helped facilitate this deal.
Workforce Potential: The region’s manufacturing heritage provides a skilled labor base that can transition to data center operations.
Regional Data Center Momentum
The Lordstown announcement builds on Ohio’s growing reputation as a data center destination:
Major Investments: Amazon Web Services has committed $7.8 billion to central Ohio, while Google has invested over $2 billion in state data center projects.
Infrastructure Advantages: Ohio’s central location provides access to 60% of the U.S. population within a day’s drive, ideal for edge computing applications.
Competitive Incentives: The state offers some of the nation’s most attractive data center incentive packages.
Educational Partnerships: Universities like Case Western Reserve University and Ohio State University are expanding programs to meet industry workforce demands.
The Broader Cleveland-Akron-Canton Opportunity
The Lordstown investment positions Northeast Ohio for additional data center development:
Enhanced Regional Profile:
- Validation Effect: OpenAI’s investment provides third-party validation of the region’s data center viability
- Infrastructure Catalyst: The project will likely drive additional fiber and utility infrastructure improvements
- Ecosystem Development: Supporting services and suppliers will follow, creating a regional data center cluster
Market Expansion Potential:
- Edge Computing: Proximity to major population centers makes the region ideal for low-latency applications
- Enterprise Colocation: Regional businesses will benefit from local data center options
- AI Training Facilities: The area’s cost advantages could attract additional AI model training operations
Development Constraints and Solutions
Despite the success in Lordstown, several challenges remain for broader regional expansion:
Power Grid Capacity: While OpenAI’s investment includes power infrastructure development, other sites may require substantial utility upgrades for hyperscale facilities.
Water Resources: Large data centers require significant cooling capacity, necessitating careful water resource management.
Skilled Labor Competition: The Lordstown project alone will create lots of jobs, intensifying competition for qualified technicians. Additionally, as the region ages and sees neutral to negative population growth, companies could choose to establish data center clusters in other markets with better underlying demographics.
Supply Chain Constraints: The rapid expansion of AI infrastructure nationwide is straining equipment and construction resources.
Economic Impact and Job Creation
The Lordstown investment represents more than just infrastructure development:
Direct Employment: OpenAI projects tens of thousands of new jobs across its U.S. sites, with Lordstown capturing a portion of that in the form of construction jobs and full time employees.
Economic Multiplier: Each data center job typically supports 3-4 additional jobs in the local economy.
Tax Revenue: The facility will generate substantial property tax revenue for local municipalities and school districts.
Supplier Ecosystem: The project will attract supporting businesses, from construction firms to specialized technology vendors.
Long Term Outlook
While some observers worry about an AI spending bubble reminiscent of the dot-com era, OpenAI’s long-term commitment suggests confidence in sustained demand. As CEO Sam Altman noted, “We’ll always be in a compute constrained world, but we never want to be this compute constrained again.”
This perspective bodes well for Northeast Ohio’s long-term prospects as a growing AI infrastructure hub.
Conclusion
OpenAI’s $400 billion Stargate investment, anchored by the Lordstown facility, represents a transformational moment for Northeast Ohio. The project validates the region’s advantages while positioning it for continued growth in AI infrastructure development.
For commercial real estate professionals, this investment signals the beginning of a new era. The combination of world-class AI companies choosing the region, supportive government policies, and fundamental geographic and economic advantages positions Northeast Ohio to capture a significant share of America’s digital infrastructure expansion.
The next few years will be critical in determining whether Cleveland and surrounding areas can build on this momentum to establish themselves as a major data center hub.
Cleveland Industrial Real Estate 
Leave a comment