Prologis US Interior Dept Explore AI in Energy Supply Chains

Prologis and the U.S. Secretary of the Interior emphasized the critical importance of energy security for supply chains and AI. They advocated for utilizing all energy sources and suggested locating AI factories in areas with ample power supply. The discussion highlighted the interconnectedness of energy availability, robust supply chains, and the successful deployment of artificial intelligence technologies. Ensuring a stable and diverse energy portfolio is seen as a fundamental requirement for supporting these vital sectors.

As artificial intelligence (AI) sweeps across the globe, the insatiable energy demands of data centers present a pressing reality for all industries. For companies at the heart of supply chains, energy reliability and cost-effectiveness directly impact operational efficiency and future growth potential.

At Prologis' annual Groundbreakers event in Los Angeles, a thought-provoking discussion unfolded between Hamid Moghadam, co-founder, chairman and CEO of Prologis, and U.S. Secretary of the Interior Doug Burgum. Their dialogue explored critical supply chain drivers with particular focus on energy reliability and AI's future development, offering valuable insights into both the logistics real estate sector's challenges and broader energy landscape.

Energy Leadership and AI's Future

"Energy leadership fundamentally means energy abundance," Burgum emphasized. "We need sufficient energy to power next-generation AI innovation and support companies like Prologis and their vital logistics customers. Affordable, reliable energy for 24/7 operations has never been more crucial."

Burgum positioned energy as a strategic pillar of national security, economic prosperity and technological advancement. In the AI era, this importance magnifies exponentially—AI training, deployment and operation require massive computational resources powered by dependable electricity supplies.

Prologis' Energy Transformation

Moghadam explained that for global logistics real estate leaders like Prologis, energy strategy begins with client needs. While real estate constitutes just 3-5% of total supply chain costs, Prologis' long-term partnerships reveal deeper operational requirements.

"Energy emerges as a dominant concern—whether moving goods within facilities or transporting them between locations. This understanding gradually drew us into energy solutions. We now transform rooftops across our properties into solar generation sites, delivering the most economical energy option for clients."

This transition reflects Prologis' client-centric approach and forward-looking vision. With vast property networks and diverse tenants, the company leverages its scale to implement renewable solutions while reducing carbon footprints.

The Data Center Conundrum

However, Moghadam cautioned that renewables alone can't satisfy surging demands, particularly as Prologis expands into data center infrastructure. "The solution requires utilizing all energy sources through collaborative efforts across industries—from advanced manufacturing to truck electrification. We must collectively address where this power will originate."

Data centers—the backbone of AI infrastructure—already consume approximately 2% of global energy, with projections climbing steadily. Meeting these needs demands diversified energy strategies combining traditional and renewable sources.

The National Energy Dominance Committee's Role

Burgum outlined his committee's mission to accelerate energy development by breaking bureaucratic barriers. "We operate like a governor's economic development team—not a policy body. Our focus is unleashing America's energy potential to support transformations like Prologis', where energy underpins every operational facet."

This interagency approach aims to streamline approvals, attract investment and foster public-private collaboration—recognizing that energy solutions require coordinated efforts across sectors.

Practical Energy Priorities

"We must move beyond energy ideology to practical fundamentals: reliability and affordability," Burgum asserted. "This means expanding all energy forms—particularly dependable baseload power—while addressing grid vulnerabilities from over-reliance on intermittent renewables."

The Secretary advocated for localized energy solutions, praising Prologis' rooftop solar initiatives where generation aligns with consumption. However, he stressed that transmission infrastructure remains critical for national competitiveness.

Infrastructure Challenges

Burgum identified pipeline and transmission line construction as America's Achilles' heel, with opposition groups prolonging approval processes. "Winning the AI race against China demands urgent infrastructure development. We must situate AI factories—where intelligence is manufactured—near energy sources to bypass protracted transmission projects."

Moghadam concurred, noting that data centers already face energy bottlenecks: "We must resolve this before advanced manufacturing compounds demand. The notion that we should stop building transmission lines must end."

Prologis' Three-Phase Energy Strategy

The CEO revealed Prologis' comprehensive approach, with over 150 employees now dedicated to energy initiatives:

Phase 1: Site selection based on existing energy availability

Phase 2: Onsite generation expansion

Phase 3: Converting urban facilities into "fill-in" data centers for AI inference tasks

"Real estate's old mantra was 'location, location, location.' Today, it's 'location, location, energy.' Our global portfolio positions us uniquely for AI's next chapter—when inference processing near population centers becomes critical."

Conclusion

This dialogue illuminates the intricate relationship between AI advancement and energy infrastructure. As computational demands escalate, diversified energy strategies, streamlined approvals and collaborative solutions become imperative for economic competitiveness and national security.

Prologis' transformation offers a blueprint for industry leadership—where understanding client needs, investing in energy innovation and adapting business models converge to meet tomorrow's challenges today.