As artificial intelligence sweeps across the global economy and data volumes grow at unprecedented rates, a fundamental question emerges: Is our infrastructure prepared to support this transformation? At Prologis' annual Groundbreakers conference, a thought-provoking dialogue between Prologis co-founder Hamid Moghadam and U.S. Secretary of the Interior Doug Burgum examined the pivotal role of energy reliability in powering the AI-driven future of supply chains.
Energy Security as the Bedrock of AI Innovation
Secretary Burgum outlined the White House's energy strategy, emphasizing energy diplomacy and domestic energy abundance as cornerstones of national prosperity. "Energy dominance truly means energy abundance. We need sufficient energy to power the next generation of AI innovation and support companies like Prologis and their logistics clients," Burgum stated. He stressed the urgent need for affordable, reliable energy to maintain uninterrupted operations.
The administration has established the National Energy Abundance Committee to streamline approvals, direct capital, and facilitate private sector access to essential power infrastructure. This initiative aims to bolster domestic prosperity while ensuring national security and international stability.
Prologis' Strategic Shift: From Real Estate to Energy Infrastructure
For Prologis, the logistics real estate giant, evolving energy needs have prompted a strategic expansion beyond traditional property management. Moghadam explained that while real estate costs represent just 3-5% of total supply chain expenses, the company's long-term client relationships reveal energy as a critical concern.
"Energy powers everything inside our buildings - from material handling to transportation systems," Moghadam noted. This insight has driven Prologis to leverage its vast rooftop spaces for solar generation, which Moghadam describes as the most economical energy solution currently available to clients.
However, solar alone cannot meet the massive power demands of emerging digital infrastructure like data centers. Moghadam emphasized the need for comprehensive solutions: "The answer lies in utilizing all energy sources while driving innovation across advanced manufacturing, electrified fleets, and equipment electrification."
The AI Arms Race and America's Infrastructure Challenge
Burgum identified America's struggle to build horizontal infrastructure - particularly pipelines and transmission lines - as a critical vulnerability in the global AI competition. "Losing the AI arms race to China would constitute an existential threat," he warned, advocating for strategic placement of AI facilities near power generation sites to bypass lengthy permitting processes.
The National Energy Abundance Committee, co-chaired by Burgum and Energy Secretary Chris Wright, operates as an economic catalyst rather than a policy body. "We're not writing policy papers - we're unleashing America's energy potential to support the transformations companies like Prologis are driving," Burgum explained.
Balancing Reliability and Innovation in Energy Supply
Moghadam outlined client priorities: "They need abundant, affordable, reliable energy that won't constrain growth." He warned that current energy bottlenecks could worsen with advanced manufacturing expansion, requiring proactive solutions before demand surges.
Both leaders rejected the false choice between renewable and traditional energy sources. Burgum cautioned against over-reliance on subsidized intermittent energy: "We must increase all forms of energy, particularly reliable, affordable baseload power." He praised distributed generation models like Prologis' solar rooftops when located near consumption points.
Moghadam revealed that Prologis now employs over 150 energy specialists, reflecting the company's strategic pivot. "The old real estate mantra was 'location, location, location.' Today, the third 'location' is replaced by 'energy' - that's what the world needs now," he observed.
The executive outlined a three-phase vision for AI infrastructure development: initial placement near existing power supplies, followed by on-site generation expansion, and ultimately the decentralization of AI processing to population centers. "With 6,000 strategically located properties, Prologis sees tremendous opportunity in converting urban assets into distributed AI inference centers," Moghadam concluded.