The artificial intelligence boom is exerting an unprecedented form of pressure on American universities—one that extends well beyond debates over classroom usage of generative AI tools. As data center developers compete for large parcels of land with reliable access to electricity, water, and fiber infrastructure, academic institutions are discovering that their holdings may be worth considerably more as AI infrastructure than as space for teaching, laboratories, or research. The competition for suitable sites has intensified as major technology companies race to build the computing capacity needed to train and deploy large AI models, with industry analysts projecting sustained growth in data center construction for years to come.

Two recent developments illustrate how higher education is being drawn into the data center economy. The George Washington University sold its Virginia Science and Technology Campus to Amazon, while the University of Michigan is pursuing a $1.25 billion high-performance computing and research facility in Ypsilanti Township.

"Universities are large landholders, and there is a land grab going on with the data centers these days," former GW professor Ellen Scully-Russ told Fortune. Scully-Russ, who previously worked at GW's Virginia campus, described the sale as emblematic of a broader trend in which institutional financial pressures collide with surging demand for data center real estate.

George Washington University's $427 Million Sale to Amazon

In February, GW announced it had sold its approximately 120-acre Virginia Science and Technology Campus in Ashburn, Virginia. The university initially declined to name the buyer or disclose the purchase price, citing confidentiality provisions in the sale agreement.

"It just came as a sudden announcement one day that they had sold the property, and that they couldn't disclose the buyer because there was some kind of a confidentiality agreement," Scully-Russ explained. "But of course, a student newspaper did their due diligence, and by the end of the day, they knew who it was, and they knew the price, and they communicated that to the community."

The buyer was subsequently identified as Amazon Data Services, which paid $427 million for the property, as reported by the GW Hatchet. The campus is located in Loudoun County, at the heart of Northern Virginia's "Data Center Alley"—one of the world's most concentrated clusters of data center infrastructure. Northern Virginia has been the largest data center market in the world for years, supported by the region's extensive fiber-optic networks, proximity to major government and military installations, and favorable utility rates. The concentration of data centers in the area has been so dense that local officials have debated moratoriums on new construction, citing concerns about strain on the power grid and transmission infrastructure.

GW stated that the sale was intended to strengthen its long-term financial position. Under the terms of the agreement, the university may continue using the property for up to five years while it determines how to relocate the programs and offices based there. A significant portion of the proceeds will be directed into a new endowment, and the university announced one-time bonus payments of $2,500 for benefits-eligible full-time faculty and $1,250 for part-time faculty.

For Scully-Russ, however, the sale marked the end of a campus that had long struggled to establish a sustainable identity within GW. She joined the university in 2009 to teach and lead a program at the Ashburn campus, and noted that the facilities were newer and, in some respects, better equipped than those at GW's Washington, D.C. campus. But the university never fully integrated the Ashburn location into its broader strategy.

"It never really got any legs, in my opinion," she said.

The campus experienced a gradual decline in resources over five or six years, she said—a process she described as "drip, drip, drip." Faculty departed through attrition and were not replaced, and teaching assistants were eventually eliminated due to budget constraints. Scully-Russ said faculty and students were not informed in advance that a sale was under consideration.

"There was no transparency," she told Fortune. "The faculty, the student body, as far as I know, were not even aware that there was a discussion about selling to anybody, let alone to Amazon."

The George Washington University did not immediately respond to a request for comment.

The university held town halls after the sale was publicly announced to discuss the transition of programs, faculty, and staff. Scully-Russ said the consultation came too late.

"It's kind of like, do you really care?" she said. "Did you care what I thought before you made this decision? Did you care to let me know that this was in the works?"

GW's broader financial context—including pressures from declining federal research funding, changes affecting international students, and systemic financial challenges facing higher education—made the decision more understandable, Scully-Russ acknowledged. GW has said the sale is part of a strategy to strengthen its finances and reinvest in its academic mission.

Still, she argued the transaction raises a fundamental question about what universities should do with their land amid an AI infrastructure expansion.

"We're chipping away at our higher ed resources to make room for this technology to expand without any accountability," she told Fortune, "or any other kind of thoughtful progression, which is really a concern for me."

Regarding the long-term outlook for higher education's involvement with data centers, Scully-Russ was skeptical.

"I think it's just a short-term bubble," she said. "We're just one technological leap away from having those huge ugly buildings being obsolete. Then what happens?"

University of Michigan's $1.25 Billion Computing Center

The University of Michigan is taking a markedly different approach. In partnership with Los Alamos National Laboratory, the university is planning a $1.25 billion research computing center in Ypsilanti Township designed to handle large-scale computational workloads. According to the university, the facility will support research spanning medicine, materials science, clean energy, engineering, and national security.

The university has been actively acquiring land for the project. In 2024, the Board of Regents approved purchases of 19.82 acres and 6.03 acres in Ypsilanti Township to support a future computing center. In 2025, the university also received authorization to purchase approximately 124.7 acres on Textile Road for the facility.

The administration is careful to distinguish the project from a commercial data center, rejecting the term "data center" on its site in favor of "computing center." The university describes the facility as a "specialized research hub" dedicated to high-performance computing for scientific research—not for "cloud computing, streaming, e-commerce and other consumer or business applications." The computational power is slated to start at roughly 50 megawatts and eventually reach 100 megawatts, according to a university report. For context, 100 megawatts represents the approximate electricity demand of tens of thousands of homes, and data centers of that scale typically require substantial cooling infrastructure, often involving significant water consumption.

The project has nonetheless drawn opposition. The Ypsilanti Township Board of Trustees unanimously passed a resolution opposing the proposed facility, "declaring strong and unequivocal opposition." Community resistance to large-scale computing facilities has become increasingly common across the United States, with residents in multiple states citing concerns about noise from cooling equipment, strain on local utility infrastructure, and environmental impacts. The University of Michigan also did not immediately respond to Fortune's request for comment.

The original article was published on Fortune.com.