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The rapid growth of artificial intelligence (AI) is creating a new challenge for American universities as demand for data centers increases the value of large properties with access to electricity, water, and fiber infrastructure.
Universities traditionally use such land for classrooms, laboratories, and research facilities. However, the growing demand for AI infrastructure is creating competition for these properties. Former George Washington University professor Ellen Scully-Russ described the trend as ‘a physical threat’ to higher education resources.
The George Washington University’s (GW) sale of its roughly 120-acre Virginia Science and Technology Campus in Ashburn, Virginia, to Amazon Data Services for USD 427 million illustrates this shift.
The campus sits in Loudoun County, part of Northern Virginia’s ‘Data Center Alley’, a major concentration of data centers.
GW announced the sale in February but initially did not identify the buyer or disclose the price, citing confidentiality provisions. Amazon Data Services was later identified as the buyer, paying USD 427 million for the property.
The university said the transaction would strengthen its long-term financial position. GW can continue using the campus for up to five years while it determines how to relocate programs and offices.
A significant portion of the proceeds will go into a new endowment. Eligible faculty and staff will receive one-time payments of USD 2,500 for benefits-eligible full-time faculty and USD 1,250 for eligible part-time faculty.
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Scully-Russ, who joined GW in 2009 to teach and lead a program at the Virginia campus, said the property struggled to become a central part of the university’s strategy.
She also described a gradual reduction in campus resources, including faculty departures that were not replaced and the eventual elimination of teaching assistants given budget constraints.
Faculty and students were not informed in advance about discussions of the sale, she said.
‘There was no transparency,’ Scully-Russ told Fortune.
She also questioned the long-term demand for large AI infrastructure projects, calling the trend potentially ‘a short-term bubble.’
The University of Michigan is pursuing a different approach with a planned USD 1.25 billion high-performance computing and research center in Ypsilanti Township.
Developed with Los Alamos National Laboratory, the project will support research in medicine, materials science, clean energy, engineering, and national security.
The facility is expected to require about 50 megawatts of power initially and eventually reach 100 megawatts. However, residents and officials oppose the project. The Ypsilanti Township Board of Trustees unanimously passed a resolution opposing the proposed facility.
