As artificial intelligence (AI) transforms global industries, the proliferation of data centers has created an unprecedented demand for energy—a resource once taken for granted that now represents the critical bottleneck in technological advancement. At the recent Prologis Groundbreakers event in Los Angeles, a revealing discussion between Prologis co-founder Hamid Moghadam and U.S. Secretary of the Interior Doug Burgum examined the pivotal role of energy reliability in sustaining both supply chains and AI development.
Energy: The Foundation of Prosperity and National Security
Secretary Burgum outlined the White House's energy strategy, emphasizing its dual focus on international diplomacy and domestic energy abundance. "Energy dominance is really about energy abundance," Burgum stated. "We need sufficient energy to power the next generation of AI innovation—more affordable, reliable energy than ever before to support companies like Prologis and their crucial logistics networks."
The administration has established the National Energy Dominance Committee to streamline permitting processes, direct capital investments, and ensure private sector access to essential power infrastructure. Burgum stressed that energy security forms the bedrock of national security, enabling both domestic prosperity and international stability.
Prologis's Energy Evolution: From Real Estate to Infrastructure
For logistics real estate giant Prologis, energy strategy has become central to operations. Moghadam explained how customer needs propelled the company beyond traditional real estate services. "While property costs represent just 3-5% of total supply chain expenses, our long-term client relationships revealed broader infrastructure requirements," he said. "We found ourselves drawn into the energy business—converting unused roof space into solar generation because it delivered the most cost-effective power for our clients."
But solar alone couldn't meet the massive energy demands of data centers and advanced manufacturing facilities. Prologis now pursues an "all-of-the-above" energy approach, transforming from a real estate firm into a comprehensive infrastructure provider.
Breaking Government Barriers to Accelerate Energy Development
Burgum described how the National Energy Dominance Committee works to dismantle bureaucratic obstacles across federal agencies, enabling faster action by industry stakeholders. "We function like an economic development organization—not a policy group," he explained. "Our mission is unleashing American energy to support the transformation Moghadam described, because energy drives every aspect of business operations."
The Secretary called for removing ideology from energy policy, returning to fundamental principles of reliability and affordability. "We must expand all forms of baseload energy—whether hydroelectric, geothermal, or Prologis's rooftop solar across their 1.2 billion square feet of space," Burgum said. "The key is generating power near where it's consumed, rather than over-relying on subsidized intermittent sources that strain our grids."
The AI Race: Energy as the Decisive Factor
Burgum issued a stark warning about America's infrastructure challenges: "We've spent decades debating pipelines and transmission lines while others built them. Whether America secures enough energy to win the AI competition with China will determine our future." He emphasized locating "AI factories"—where computational intelligence is produced—near energy sources to avoid transmission bottlenecks.
Moghadam concurred, noting that data centers already face energy constraints. "We must solve this before demand explodes," he urged. "Why create false choices between renewable and traditional energy? We need both—and more. If an AI factory processes information where power is generated, that's far more efficient than transporting energy elsewhere."
The Future: Distributed AI and Urban Inference
Looking ahead, Moghadam described a three-phase evolution: first locating AI facilities near existing power sources, then increasing on-site generation, and ultimately distributing inference processing near population centers. "Latency becomes critical when AI serves end-users," he explained. "Prologis sees tremendous opportunity in our 6,000 urban properties worldwide—buildings we can adapt into distributed data centers for this next phase."
As the discussion concluded, both leaders agreed that solving America's energy challenge requires pragmatic collaboration between government and industry—with AI innovation and economic competitiveness hanging in the balance.