With Silicon Valley running out of space and power to satisfy the exploding demand for data centers, investors have been looking around the San Francisco Bay Area for new sites to power the region's booming artificial intelligence industry.
One Connecticut-based data center developer has settled on the East Bay town of Pittsburg, California, where it plans to build the area's first-ever data center as part of a larger technology campus. It’s a community with industrial roots in the easternmost reaches of the Bay Area, where land and — most important — power is relatively cheap.
Avaio Digital Partners is preparing to break ground on the 340,000-square-foot Perseus Data Center on the site of the defunct Delta View Golf Course at 2232 Golf Club Rd. The 92-megawatt data center is set to be the first facility in the 76-acre Pittsburg Technology Park and the first data center in Pittsburg, said the company in a statement it issued after winning a green light from Pittsburg city officials in December.
Demand for data centers has skyrocketed across the country with the growth of AI startups, firms been clamoring for data center space as well as power. At the same time, demand for traditional data centers is growing because of the need for more data storage. Financing for new data center development is expected to achieve another record year, with about $170 billion in asset value to fund more powerful and efficient data center space, according to JLL's 2025 Global Data Center Outlook report.
Developers are increasingly eyeing the East Bay region of the Bay Area for its cheaper real estate that’s still within driving distance of Silicon Valley and San Francisco. Denver-based Stack Infrastructure pitched a plan last year to develop a 310,000-square-foot data center in the town of Hayward, another historically working-class suburb south of Oakland.
Santa Clara boom
So far, many data centers in the industry’s home region of Silicon Valley have been clustered in San Jose and especially Santa Clara. That city is home to major tech players like Nvidia and Intel and also its own power plant and not-for-profit utility company, Silicon Valley Power, meaning the going rate for electricity there is considerably cheaper than that offered by Northern California’s dominant power supplier, Pacific Gas & Electric.
Santa Clara is the third-largest data center market in the United States after Northern Virginia and Dallas, Texas, according to CBRE.
But the town of about 130,000 people is beginning to feel a strain on its power grid. The less than 20-square-mile enclave is home to more than 50 data centers, by the city’s estimate. The first ones appeared in the early 2000s following the so-called dot-com bubble that accompanied the early explosion of the internet. In late 2024, city officials approved a four-story, 112,000-square-foot data center at 1231 Comstock St.
Officials say these centers now consume about 60% of Santa Clara’s power. Manuel Pineda, Silicon Valley Power’s chief electric utility officer, warned the City Council at a meeting in 2024 that the utility would not be able to deliver power to every data center currently applying to set up shop within the city limits.
“We’re getting close to reaching our system operating limit,” Pineda said, a strain exacerbated by homebuilding and expanding corporate headquarters in the area.
Avaio said it had looked to Pittsburg in particular because it, too, has a public utility, the Pittsburg Power Company, that, like Santa Clara, tends to offer electricity at cheaper rates than PG&E.
“The Pittsburg Technology Park will offer a strategic solution to the growing regional demand for data centers, particularly as development in Santa Clara faces both power and land constraints,” said the company in a statement it issued in December.
Avaio noted that its partnership with the Pittsburg Power Company ensures that the Perseus Data Center and the larger Pittsburg Technology Park will get “competitive” electricity rates on par with Santa Clara’s. A huge amount of power is required to run data centers, which are specialized facilities that house powerful computer servers, storage systems, and networking equipment.
Generating jobs, too
Avaio said the Pittsburg data center represents a more than $800 million investment in the community and “promises significant economic benefits for the city and the greater East Bay.” Avaio said the facility will be powered by “90% zero carbon sources” and cooled with 100% recycled water.
The town of Pittsburg is in eastern Contra Costa County about 40 miles from San Francisco with a historic identity as coal mining center and steel manufacturing center — hence, the town’s name, which was meant as a tribute to its much larger and better-known steel-manufacturing counterpart in Pennsylvania.
City officials are hoping the data center will ultimately bring badly needed local jobs and economic renewal to Pittsburg, where U.S. Steel recently closed a steel mill that previously employed generations of local families. Another major employer, Corteva Agriscience — a spinoff of Dow Chemical, shuttered its production operations in the town. Meanwhile, Pittsburg has seen an explosion of new residents in recent years as people have migrated east in search of affordable housing.
“We’re a diverse, close-knit community with an industrial heritage, which is something we’re very proud of,” said Jordan Davis, Pittsburg’s economic development director. “But we’re at a point now where those industries are gone, and it’s a lot tougher for people to find jobs in their hometown.”
Data centers are not big generators of jobs themselves, but Davis is hopeful that the new facility, which aims to begin construction this year and come online in 2027, will attract new secondary and tertiary businesses and breathe new life into Pittsburg’s existing businesses by improving the town’s digital infrastructure.
The approximately 40-year-old Delta View Golf Course closed in 2018 amid a decline in popularity and rising water costs that shuttered a wave of similar facilities in the area. Avaio purchased the site for $16.7 million from the city in 2022.