The Big AI-pple: New York as a Center for AI and Neutral Interconnection

Business hub, cultural melting pot, and world economic capital: New York City has it all. Home to the NYSE and NASDAQ, the city outranks London and Singapore as one of the most attractive places from which to run a global enterprise. 

Far from being the preserve of the elite, however, New York is also home to countless small businesses and startups. Of the 220,000 businesses that choose to call the city their home, a staggering 89% are still at the beginning of their growth journey.

Now, in the age of AI, the Big Apple is looking to hold onto its claim as the world capital. The city currently has the second-highest concentration of AI companies in the US and more AI-based job openings than the famed Bay Area in San Francisco. It’s also placed third in the global rankings of the top cities for AI start-ups. 

What the average NYC visitor doesn't know, is that the data center and interconnection market on the Hudson River is also unique. Companies from the digital economy find a variety of North American and international networks in the city. Networks that are not only the lifelines for the booming AI economy in the US, but for digital business relationships overall. These networks converge at what are known as “neutral internet exchanges” or neutral IXs – and are doing so with increasing frequency. 

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IXs are vital to a booming digital economy. While Wall Street allows shares to change hands, IXs enable the exchange of data packets, and the faster those data packets can be securely shared, the more productive those businesses can be. In fact, no other city in the US has more network connections at internet exchanges than NYC. So, what does this all mean? 

Neutral IXs Are the Key to Unlocking Growth 

Data traffic within and between US cities flows completely differently today than it did 10 years ago. Since 2014, the number of IXs in the US has increased sixfold. What’s more, independent and neutral IXs – which long played second fiddle to the historically dominant US model of IXs owned and operated by a single data center or carrier – now account for 70% of the 50 largest internet exchanges in the US. 

The advantages of the data center and carrier-neutral design are obvious: more data centers can be interconnected in a distributed manner, so connections can be made more redundant, fail-safe, and flexible since there is no provider lock-in. 

Open to a greater number of networks via a variety of data centers from throughout the entire metropolitan area, these IXs rapidly build network density and data gravity. Beyond this, they assist companies that can’t be in the center of the city to still participate in a city’s vibrant digital ecosystem. 

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The New York model has successfully disproven the doubters who believed that the city's market could not support another Internet Exchange. Today, network capacities are growing in data centers across the metropolitan area, provider-neutral IXs are growing, and the data center-operated interconnection infrastructures continue to flourish. The feared fragmentation has not materialized – instead, we see a unique and vibrant interconnected digital ecosystem.

A healthy digital ecosystem within a metro market is fundamental to a city’s economic growth. Companies that rely, for example, on artificial intelligence cannot do so without robust, highly resilient, and high-performance connectivity. The kind of connectivity provided by distributed and neutral interconnection platforms.

Thanks to AI: More Than $320B GDP in New York by 2038 

In addition to access to a multitude of networks and redundant connectivity, the speed of data exchange is particularly crucial to New York’s triumph as a digital location. As with the shares on Wall Street, data packages must be able to be exchanged in a fraction of a second. 

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By connecting various data centers in and outside of Manhattan, distributed and neutral internet exchanges enable the growth of an interconnection ecosystem where rapid data transfer becomes the rule rather than the exception. 

Regardless of whether the data center is in New York City, New Jersey, Long Island, or Brooklyn, the connected networks can guarantee latency times in the low millisecond range. 

Network operators and companies have recognized the importance of fast connections for exchanging data and know that the Internet is not merely a useful tool, but the very foundation of our economy. 

While we, as end users, generally perceive slow internet as an annoyance, a delay when using AI can quickly become a critical bottleneck. With the growing importance of the combination of real-time data analytics and generative AI as a strategic driver of business growth, companies everywhere are becoming increasingly dependent on network connections offering the highest level of performance.

Neutral IX platforms make low-latency data exchange accessible to all who need it, enabling untold innovations and optimizations and enhancing profitability – especially in NYC. According to Accenture, New York State could increase its GDP by $320 billion by 2038 with the help of AI. 

AI may be the new kid in town, but it’s the underlying connectivity that will see that kid mature and lead a new generation of growth and innovation around the world.

Ivo Ivanov is CEO of DE-CIX, a global provider of carrier and data center-neutral internet exchange services.