G42's Core42 has signed a lease for 20MW in a repurposed office building in Minneapolis as the UAE broadens its AI data center presence in the US.

      Core42, a subsidiary of Abu Dhabi's G42 Group focused on cloud services, has leased 20 megawatts in a repurposed office building in downtown Minneapolis. This development is part of a larger trend where the same AI technologies that are rendering offices empty are also driving the need to convert them into server facilities.

      The property at 1001 Third Avenue South in Minneapolis, previously an office space, is now functioning as a data center, with Core42 as its primary tenant. This transaction, reported by Bloomberg on Wednesday, involves a lease of 20 megawatts in a building that Legacy Investing, a Virginia-based company, has transformed at a cost exceeding 70 million dollars. This lease is a small part of G42's broader efforts, as they are simultaneously constructing the largest AI compute facility outside the United States, while filling locations that once housed white-collar workers whose roles are being replaced by AI technologies.

      G42, under the leadership of CEO Peng Xiao and with support from Abu Dhabi’s national security adviser Sheikh Tahnoon bin Zayed Al Nahyan, is a key player in the UAE's AI infrastructure investments. The firm is constructing the Stargate UAE campus, which is part of a major joint venture with OpenAI, SoftBank, Oracle, and Abu Dhabi's MGX, spanning about 19 square kilometers south of Abu Dhabi. The initial phase of this project includes a 200 megawatt compute cluster, set to be operational by the end of 2026, with plans for a total capacity of one gigawatt, costing over 30 billion dollars. This initiative has already faced geopolitical threats, including warnings from Iran about potential retaliatory actions against Gulf infrastructure.

      Core42's expansion in the US is not limited to Minneapolis. The company has also signed a decade-long lease with TeraWulf for over 70 megawatts of data center capacity in New York, with an option for an additional 135 megawatts. Furthermore, G42 is investing one billion dollars in a data center in Vietnam and has established Core42’s European headquarters in Dublin. While the 20 megawatt lease in Minneapolis may seem modest compared to its global operations, its strategic location in a downtown area of a city that has seen rising vacancy rates since the pandemic makes it significant.

      Legacy Investing purchased 1001 Third Avenue South in 2019 and has made substantial investments to convert the six-story building from office use to a data center. In 2025 alone, over 70 million dollars were spent to increase the building's capacity from approximately two megawatts to 21 megawatts. In January 2026, Cloud Capital and Bahrain’s Arcapita acquired the property for 235 million dollars, highlighting the premium that data center conversions are now fetching compared to traditional office valuations.

      The economics behind converting offices to data centers have become persuasive enough to change urban real estate markets. US utilities are projected to invest 1.4 trillion dollars by 2030 to support the AI boom, and demand for data center capacity is surpassing the availability of purpose-built facilities. Transforming existing office buildings allows developers to bring these facilities to market more rapidly than new construction, assuming the buildings can meet the requirements for modern computer hardware. Not all offices are suitable for such purposes; those that meet the criteria, usually featuring reinforced concrete, access to fiber networks, and adequate electrical capacity, have become highly sought-after in commercial real estate.

      G42's strategy in establishing American data centers reflects a broader trend in how sovereign AI goals are being realized in the US. The company is not just creating computing capacity abroad; it is also gaining a physical foothold within the US power grid, fiber network, and real estate market. The leases in Minneapolis and New York, along with facilities in California and Texas, form a distributed infrastructure that allows Core42 to provide what it describes as sovereign cloud and AI infrastructure—capacity supporting both its own AI operations and those of US-based clients that need to maintain data residency on American soil.

      The competition for data center capacity has attracted startups, sovereign wealth funds, and tech giants vying for limited resources such as power, land, cooling, and connectivity. The conversion of the Minneapolis office by Legacy Investing into a 21 megawatt facility demonstrates how developers are adapting by utilizing existing urban infrastructure instead of pursuing new sites in suburban areas where most large data centers are located. However, this approach has limitations; 20 megawatts represents only a fraction of what a purpose-built facility typically provides, and the constraints of existing structures can hinder future expansions. Nonetheless, for tenants like Core42, the urban conversion model offers advantages over rural developments, including closer proximity to enterprise clients and the interconnectedness of networks in a major urban center.

      The geopolitical implications of UAE-affiliated AI infrastructure in the US remain delicate. G42 severed its connections with Chinese tech firms in 2024 due to US government pressure, which was essential for gaining