Prologis chief executive and co-founder Hamid Moghadam says energy has become almost as important as location in deciding where major logistics schemes are developed.
Speaking at the firm's annual Groundbreakers conference, Moghadam said Prologis had been "dragged into the energy sector" due to customers' demands for abundant, affordable energy, seeing it morph into a "digital infrastructure business", rather than purely real estate.
"We have over 150 people who do nothing other than energy, and this is not just for data centres, this is for everything," he said. "It used to be location, location, location... I would say it's location, location and the third location is replaced with energy because that is what the world needs."
Moghadam, who was joined onstage by the US Secretary of the Interior Doug Burgum, added that the power needs of emerging technologies, such as AI and electric vehicle charging, meant all energy sources, including non-renewable fuels, should be considered for sites and unblock delays to development.
He said: "We are spending a lot of time and money on data centres and they have veracious appetite for energy, way beyond what renewables alone can produce.
"The answer to energy and our infrastructure business is very simple – energy from all sources and then some, and we need to apply everything we have to solve that problem. It's not just data centres, it's advanced manufacturing, it's the electrification of the fleet of trucks."
"Everybody is plugging everything into the wall and we need to figure out where all that power is going to come from," he added.
The Prologis chief continued his support for the use of nuclear power, outlining what he called an "ambitious" target to have small modular reactors up and running at Prologis sites by 2027-28, ensuring baseload energy, the minimum amount of electric power delivered or required over a given period of time at a steady rate, for customers.
His comments follow a major announcement made ahead of President Trump's visit to the UK earlier this month, when UK warehouse giant Tritax Management agreed a partnership with energy equipment provider Holtec International and energy supplier EDF to develop a 1 gigawatt data centre at a former Nottinghamshire power station, powered by the former's SMR-300 small modular reactors.
Moghadam said: "[Customers] want abundant energy, they want it at an economic cost – they want it to be reliable – and they don't want that to be the constraint on the growth of their business, and it's becoming one.
"If you talk about the data centre business, clearly energy is the bottleneck right now but, once this advanced manufacturing gets going, that's going to become the bottleneck, so we've got to solve this problem ahead of that demand really taking off."
"We've got to add grid capacity and we've got to add capacity on premises where these factories are placed," he added.
Moghadam, who plans to retire as CEO of Prologis next year after leading the firm and its predecessor for almost four decades, also said that the group saw a "huge opportunity" in data centre development, suggesting that it had been evaluating its global portfolio to see which schemes it could convert into these types of facilities.
He said properties it owned near major neighbours could be adapted to host data centres when AI technology advances and "latency", the time it takes for data to travel between two points, becomes more of a consideration.
"When the large language model processing that is happening in these big AI factories is no longer the main game, but inference, close to population centres is where the game is, latency will become a big factor, and latency as big a factor when you are dealing with LLMs.
"That's where Prologis sees a huge opportunity because we've got 6,000 buildings in the major population centres in the world that kind of look like data centres except for the inside, and we know how to turn them into data centres. So we are very excited about that infill data centre inference opportunity."
Sharing his suggestions for how governments could help industrial and logistics developers to progress with their strategies, Moghadam argued reducing red tape and bureaucracy was key, particularly in regard to aiding innovation.
He said: "CEOs are action orientated, at least the ones I know about, they want the government to get the hell out of the way and create the conditions where they can do their job... I have never heard a CEO say, 'give me more bureaucracy, give me more red tape and I'll love you for it', it just doesn't happen that way."
Burgum said the US government wanted to support Prologis and other firms like it, with the Trump administration looking to provide "energy abundance". He added: "We want to have the energy to power the next generation of innovation.
"In AI, we want to support great companies like Prologis [and] all of their important logistics customers. We need more than ever affordable, reliable and low-cost energy that runs seven by 24... We 're working to shorten permitting times, drive capital, help the private sector get the power they need for prosperity to occur at home."