As artificial intelligence continues to evolve at breakneck speed, the demand for powerful, reliable and scalable infrastructure is skyrocketing. For startups training large language models and hyperscalers managing sprawling AI applications, the right data center solution is no longer a luxury—it’s a necessity. That’s where colocation for AI companies comes into play.
Rather than investing millions in building and maintaining private data centers, more and more AI-driven organizations are choosing colocation to meet their infrastructure needs. But not all colocation providers are created equal—especially when it comes to powering the next generation of intelligent computing.
So, what exactly should AI companies look for in a colocation partner? Three things rise to the top: location, power, and connectivity.Learn more below.
Why Location Still Matters in a Cloud-First World
Sure, AI is software-driven—but the physical infrastructure behind it has to live somewhere. And proximity still matters more than you might think.
Many AI workloads require massive datasets to be transferred between systems in real time. Whether it’s model training, inference or processing video at scale, low latency is key. Choosing a colocation facility located near major internet exchanges and cloud on-ramps reduces delays and boosts performance.
In addition, colocation in geographically strategic locations supports hybrid architectures. AI teams can keep their most compute-intensive operations in one place while maintaining flexibility across cloud platforms and edge locations.
Powering High-Density AI Workloads
AI workloads aren’t just data-hungry—they’re power-hungry too. Training large models or running inference at scale often requires high-density rack configurations with specialized GPUs or other accelerators. That can mean 20kW, 30kW or even more per rack.
Not every colocation provider can handle those kinds of loads—especially not while maintaining proper cooling and energy efficiency. Facilities designed with traditional enterprise workloads in mind may fall short when faced with the thermal and power demands of modern AI.
AI companies should seek out colocation environments that offer:
- Scalable power per rack to accommodate current and future workloads
- Advanced cooling systems like in-row or liquid cooling
- Redundant power architecture (N+1 or higher) to guarantee uptime
- Sustainable energy sourcing, where possible, to support ESG goals
The ability to grow power capacity on demand can be the difference between scaling smoothly and hitting an operational wall.
Connectivity: The Hidden Engine Behind AI Performance
AI is collaborative by nature. Whether you’re sourcing data, accessing cloud platforms or syncing across edge devices, your AI infrastructure needs to be hyper-connected.
That’s where carrier-neutral colocation shines. By placing infrastructure in a facility with direct access to major carriers, cloud providers, and internet exchanges, AI companies can:
- Eliminate bottlenecks
- Improve response times
- Optimize costs with diverse routing options
This level of interconnection is critical for enabling real-time applications like autonomous systems, computer vision, or natural language processing at scale.
Why AI Companies Shouldn’t Go It Alone
Building a private data center sounds appealing in theory, but in reality, it can be:
- Prohibitively expensive
- Time-consuming
- Resource-intensive to maintain
Colocation offers a faster, more cost-effective path to production—without sacrificing performance. It provides access to top-tier infrastructure, environmental controls and operational expertise without requiring companies to divert resources from their core innovation efforts.
And as AI companies grow and evolve, colocation offers the flexibility to scale infrastructure up (or down) without the added costs of building from scratch.
Why 165 Halsey is the Perfect Fit for AI Companies
Located in Newark, New Jersey, just minutes from New York City, 165 Halsey offers everything AI companies need from a colocation provider:
- Unmatched connectivity with direct access to over 60 networks and peering points
- Scalable power and infrastructure built to support high-density deployments
- Proximity to major financial, research, and cloud ecosystems
- Carrier-neutral flexibility for optimizing network performance and cost
- A reputation for security, reliability, and customer-focused service
With decades of experience supporting mission-critical infrastructure and a commitment to evolving with customer needs, 165 Halsey is more than just a data center—it’s a long-term partner for AI innovation at scale.
Ready to take your AI infrastructure to the next level? Explore how colocation at 165 Halsey can help you build smarter, scale faster and stay ahead of what’s next. Contact us today to learn more.