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The way they see it, an obscure law passed in 2008, known as the Biometric Information Privacy Act, is keeping them from cashing in on the biggest wave of growth the industry has ever seen. Artificial intelligence, particularly the type of software behind ChatGPT and other chatbots, has led to an explosion in data center construction. Real estate services firm Jones Lang LaSalle estimates the amount of data center construction that could break ground or be completed in the next five years across North America will more than double from the previous five years.
As the nation's third-largest city, Chicago has long been one of the top markets for data centers, but it's losing ground because of fears that BIPA could leave AI companies vulnerable to costly class-action lawsuits if they gather or use biometric information without consent in operating or training in their software. The shift threatens Chicago's status and could cost the city thousands of jobs and billions in investment at a time when construction activity is weakening.
"(BIPA) is causing a pause in the state of Illinois by cloud providers and those with AI investment," says Dan Diorio, vice president of state policy for the Data Center Coalition, a trade group that represents data center operators, including Amazon, Cyrus One, Digital Realty, Equinix, Google, Meta, Microsoft, Prologis and T5. "We have developments that are a bit stalled."
Data center developers say some of the biggest projects are bypassing Illinois for Indiana, Iowa, Michigan and Wisconsin.
"You're probably seeing north of $100 billion of projects that have gone directly over the border to other states," says Andy Cvengros, an executive managing director at JLL. "Hyperscalers all but killed everything that they were planning to do here in Illinois in favor of going elsewhere. Big AI leases have gone elsewhere."
One frequently cited example is Amazon's $11 billion data center complex under construction near South Bend, Ind.
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