From Cubicles to Compute: Core42 Repurposes Minneapolis Office for AI Infrastructure

In a striking irony of the digital age, the same artificial intelligence systems driving white-collar workers out of downtown offices are now providing the economic incentive to fill those empty buildings with servers. This trend is most evident in downtown Minneapolis, where Core42—the cloud and AI infrastructure arm of Abu Dhabi’s G42 Group—has leased 20 megawatts of capacity in a converted commercial office building.

The move is a strategic piece of a larger global puzzle. As G42 builds the world’s most ambitious AI compute facilities in the desert, it is simultaneously securing a physical footprint within the American power grid and commercial real estate market.

The Minneapolis Conversion: 1001 Third Avenue South

The facility at 1001 Third Avenue South represents a significant pivot in urban real estate. Once a traditional office space, the six-story property was transformed into a data center by Virginia-based developer Legacy Investing. To create this transition possible, Legacy Investing spent over $70 million on improvements in 2025 alone, expanding the building’s capacity from approximately two megawatts to 21 megawatts.

The market value of such conversions is rising rapidly. In January 2026, a joint venture between Cloud Capital and Bahrain-based asset manager Arcapita acquired the property for $235 million. This valuation reflects a growing premium for data center conversions over traditional office spaces, as developers seek faster paths to market than ground-up construction allows.

Sovereign AI and the Stargate UAE Campus

Although the Minneapolis lease is modest in scale, it supports the broader ambitions of G42, led by CEO Peng Xiao and backed by Abu Dhabi’s national security adviser, Sheikh Tahnoon bin Zayed Al Nahyan. The company is currently developing the Stargate UAE campus, the international flagship of a $500 billion joint venture involving OpenAI, SoftBank, Oracle, and the Abu Dhabi sovereign investment vehicle MGX.

Spanning approximately 19 square kilometers south of Abu Dhabi, the project is designed for massive scale:

• Phase One: A 200 megawatt compute cluster utilizing Nvidia Grace Blackwell GB300 systems, scheduled to be online by the conclude of 2026.
• Full Build-out: A target capacity of one gigawatt, with projected costs exceeding $30 billion.

This rapid expansion has not come without risk. The project has already faced geopolitical tensions, with Iran issuing warnings of retaliatory strikes against Gulf infrastructure, including commercial data centers.

The Economics of Urban Repurposing

The shift toward converting existing office buildings is driven by a critical shortage of power, land, and cooling. US utilities are planning to spend $1.4 trillion by 2030 to keep pace with the AI boom, while the International Energy Agency predicts that data center energy use will double by the end of 2026.

Converting reinforced concrete office buildings that are already close to fiber networks and electrical capacity allows providers like Core42 to achieve “network interconnection density.” This provides a distinct advantage over rural “greenfield” sites by placing compute capacity closer to enterprise customers in major metropolitan areas.

Geopolitics and the American Pivot

G42’s aggressive expansion into the US is the result of a calculated geopolitical realignment. In 2024, the company severed ties with Chinese technology firms under pressure from the US government—a necessary step to secure access to advanced American AI chips.

This shift was cemented by a $1.5 billion investment from Microsoft into G42. By establishing a distributed infrastructure footprint across New York, Texas, California, and Minnesota, Core42 is positioning itself as a provider of “sovereign cloud” infrastructure. This allows the company to serve its own workloads and those of US-based customers who require their data to remain within American borders.

Looking Ahead: A New Real Estate Paradigm

The conversion of 1001 Third Avenue South is more than an architectural change; it is an economic signal. As Alphabet raises its 2026 capex estimates to between $180 billion and $190 billion and other hyperscalers race for capacity, the demand for compute will continue to cannibalize the demand for traditional office space.

Core42’s strategy demonstrates that the future of AI infrastructure isn’t just about massive desert campuses—it’s about infiltrating the existing urban fabric of the world’s most powerful economies.