Five miles south of downtown Los Angeles, one industrial block in Vernon uses as much electricity as a small town.
Inside the three-story, 242,000-square-foot building known as LAX01, rows of advanced artificial intelligence chips hum across six data processing buildings, consuming enough electricity to power more than 26,400 homes for a year. The processors are part of a fast-growing network of data centers transforming this rusty industrial corner of Los Angeles County.
Vernon has a little more 200 residents and a long, colorful history dating back to its industrial roots. Over the years, he has battled corruption scandals and environmental issues. pollution accusations.
It was once on on the verge of being unincorporated amid allegations that it was controlled for decades by a small group of families and their associates. His story helped inspire season of the HBO crime drama True Detective.
Today, Vernon is emerging as the unlikely hub of Southern California's artificial intelligence infrastructure.
“The race for superintelligence is changing infrastructure requirements across all industries,” said Michael Wall, executive vice president of Prime Data Centers, which built the Vernon data center. “We are working to provide enterprises with the foundation they need to build and implement the next generation of artificial intelligence models—faster, more efficiently, and at scale.”
Prime and other developers, including Goodman Group, CoreSiteAnd Digital real estate, plans to build a new data center with hundreds of megawatts of capacity in Vernon, said Darren Eads, managing director of data center specialist JLL.
Companies are buying up property in Vernon and renovating it, installing modern cooling systems in old office buildings and filling a closed slaughterhouse that once housed pigswith advanced chips.
“It’s been a while since we’ve seen new data center development in Southern California,” Eads said. “A new wave is hitting the coast, driven primarily by artificial intelligence.”
Construction is underway throughout the country.
According to Google, Amazon, Microsoft and Meta, they will invest $465 billion in 2025 to create computing and networking infrastructure for artificial intelligence. Goldman Sachs.
One Harvard economist has estimated that without investment in data centers, America's gross domestic product could virtually grind to a halt this year.
There are more than 70 data centers in Los Angeles. Their center has long been the One Wilshire building in downtown Los Angeles. It is the destination of huge undersea cables connecting the US to Asia.
All the major carriers are located inside the building, creating a dense ecosystem of data centers for providers like Netflix, Amazon and Microsoft.
As One Wilshire becomes increasingly crowded, data center companies are opening in Vernon, attracted by its independent, relatively inexpensive electricity and proximity to One Wilshire.
Vernon operates its own publicly owned utility company that provides electricity, water, gas and fiber-optic internet to customers. This allows the city to offer excess power at rates half those of other Southern California suppliers.
Vernon is also attractive because of his lack of NIMBYism.
Its population is so small that there are few neighbors around to notice or protest any potential noise pollution or other environmental impacts emanating from the data centers.
Across the country, communities have blocked or delayed billions of dollars in planned data center investments, fearing they could use up too much water and cause electricity rates to rise.
Opposition arises in both red and blue counties and affects both urban and rural communities. One local example is the ongoing delay in construction of a proposed data center in Monterey Park.
Vernon responded to a request for comment by sharing a frequently asked questions document that said the addition would not impact energy prices or water availability for residents or businesses.
“No additional purchases of electricity or water are required to support the new electrical load and water demand, costs that often result in rate increases in other utility jurisdictions,” the document states.
“To date, the City has not received any objections from the public,” a spokesperson said in an email.
Some analysts say increased demand for electricity, as well as the rising cost of building the infrastructure to deliver it, will inevitably lead to higher electricity tariffs.
California is already the third-largest data center in the country, behind Texas and Virginia. Electricity consumption will reach a record due to the demand for electricity in data centers. Utilities such as Pacific Gas & Electric plan to spend $73 billion to upgrade transmission lines.
Bloomberg analysis shows that over five years, energy costs have risen by as much as 267% in areas near data centers.
California has historically been a market that data centers have avoided whenever possible due to the state's high land and power prices and burdensome regulations.
JLL's Eads noted that local regulations limit projects to 49.9 megawatts to avoid excessive paperwork and licensing requirements for larger facilities. That's one reason the proposed data centers in Vernon fall below that threshold.
However, the demand for AI continues to grow. If this continues, even Vernon's excess capacity could reach its limit due to the influx of new data centers, analysts say.
“We weren't talking about megawatts when we thought about data centers; we tend to think only in terms of kilowatts,” Robert Brooks, vice president of sales for Lambda, the cloud computing company that leased most of the LAX01 data center.
