Key highlights
- 1The U.S. data center construction market is expected to reach USD 165 billion by 2036, at a CAGR of 11.0% from 2026 to 2036, from a historically high base.
- 2Virginia, home to the world's largest data center market in Northern Virginia, is the largest state market, followed by fast-growing Texas and Georgia.
- 3Hyperscale data centers account for the largest share of construction, driven by cloud and AI providers.
- 4Electrical and power infrastructure is the largest and fastest-growing construction scope, reflecting the power intensity of AI facilities.
- 5U.S. data center construction starts soared from USD 26.9 billion in 2024 to USD 77.7 billion in 2025, driven by AI.
- 6Hyperscalers are committing enormous capital, with 2025 capex of roughly USD 100 billion at AWS, USD 80 billion at Microsoft, USD 75 billion at Google, and USD 65 billion at Meta.
- 7Data centers consumed about 4.4% of U.S. electricity in 2023 and could reach 6.7% to 12% by 2028, according to the DOE and Berkeley Lab.
- 8Power availability, not capital, has become the binding constraint on where and how fast data centers can be built.
- 9Transformer and generator lead times, skilled labor, and speed-to-market are the primary constraints on the market.
U.S. Data Center Construction Market: AI-Driven Hyperscale Demand, Power Constraints, and Speed-to-Market Drive Market Growth
- 1
AI Is Driving an Unprecedented Construction Boom
Artificial intelligence is driving an unprecedented boom in data center construction, the fundamental driver of the market. The computing power required to train and run AI models has generated enormous demand for new data center capacity, and U.S. data center construction starts rose from USD 26.9 billion in 2024 to USD 77.7 billion in 2025, an increase of around 190%, reflecting a compounded growth rate of nearly 100% over four years. Total U.S. data center investment is estimated to have topped USD 425 billion in 2025, with roughly 70% coming from hyperscalers, and Goldman Sachs has projected hyperscaler capital expenditure from 2025 through 2027 at around USD 1.15 trillion, more than double the prior three years. Hyperscalers are developing campuses of unprecedented scale, from several hundred megawatts to the first gigawatt-scale projects. This AI-driven surge in demand is the central force behind the market and has taken construction activity to a historically high level.
- 2
Hyperscaler Capital Expenditure Anchors Demand
The enormous capital expenditure of the hyperscale cloud and AI providers anchors demand in the market. The largest technology companies are investing at a scale without precedent: for 2025, capital expenditure guidance included roughly USD 100 billion at Amazon Web Services, USD 80 billion at Microsoft, USD 75 billion at Google, and USD 65 billion at Meta, much of it directed at data center construction. These companies, together accounting for around 70% of U.S. data center investment, sponsor the largest projects, such as Meta's roughly USD 10 billion campus in Louisiana, being built by a team including Turner, DPR, and Mortenson, and multi-company initiatives such as the Stargate project. This concentration of demand among a small number of hyperscalers, investing at extraordinary scale, drives the market and shapes its structure, and the pace of hyperscaler spending is the single most important determinant of the volume of data center construction.
- 3
Power Is the Binding Constraint on Construction
Power availability has become the binding constraint on data center construction, fundamentally shaping where and how fast facilities can be built. According to the U.S. Department of Energy and Lawrence Berkeley National Laboratory, data centers consumed about 4.4% of total U.S. electricity in 2023 and could consume between 6.7% and 12% by 2028, with total usage rising from 176 TWh in 2023 toward 325 to 580 TWh by 2028. This surging demand has strained the grid, and the availability of power, more than capital or even land, now determines where data centers can be sited and how quickly they can come online, with grid interconnection timelines and transformer lead times becoming critical. In response, developers are increasingly pursuing on-site and dedicated power, including natural gas and, prospectively, nuclear, and integrating substantial power infrastructure into projects. Power has become the central variable in the market, reshaping siting, design, and the pace of construction.
- 4
Data Center Construction Is Uniquely Complex and Power-Intensive
Data center construction, particularly for AI, is uniquely complex and power-intensive, which shapes the market and its specialized supplier base. Modern AI data centers require vast electrical infrastructure, including substations, transformers, switchgear, and backup generation, and sophisticated cooling systems, increasingly liquid cooling to handle the heat of dense AI computing, in addition to the building itself. On many AI projects, the electrical and mechanical scope can dominate the cost and complexity of the project, dwarfing the shell and core. This complexity, combined with intense schedule pressure to bring capacity online quickly, requires specialized contractors with deep expertise, and firms such as Rosendin, the leading hyperscale electrical specialist, are increasingly delivering integrated, prefabricated power systems. The complexity and power intensity of data center construction differentiate it sharply from conventional construction and make it a distinct, high-value market.
- 5
Specialized Contractors and the Race to Build Fast
The market is defined by a race to build fast, favoring specialized contractors with the capability and capacity to deliver at speed and scale. The intense demand and competitive pressure to bring capacity online have made speed-to-market paramount, and developers favor experienced firms that can deliver large, complex projects on aggressive schedules. Leading general contractors such as Turner, DPR, Holder, Mortenson, and others, together with specialized electrical contractors such as Rosendin and mechanical contractors, compete for the largest projects, increasingly using modular and prefabricated construction to compress schedules. Supply-chain constraints, including long lead times for transformers, generators, and cooling equipment, and shortages of skilled labor, are significant challenges that specialized firms are best positioned to manage. The premium on speed, scale, and specialized capability concentrates the market among experienced contractors and is central to its competitive dynamics.
- 6
Geographic Concentration and Emerging Markets Shape the Market
The geographic concentration of data centers and the emergence of new markets shape the structure of the market. Data center construction has historically concentrated in a small number of markets, above all Northern Virginia, the largest data center market in the world, along with markets such as Dallas, Atlanta, Phoenix, and Chicago, driven by the availability of power, land, connectivity, and incentives. As power and land become constrained in established markets, development is spreading to new locations, including Ohio, Iowa, Louisiana, and other states, often chosen for power availability, and hyperscalers are pursuing very large campuses in emerging markets. This combination of established hubs and emerging markets, driven increasingly by the availability of power, is shaping the geography of construction and broadening the market across the country.
Segmental analysis
By Data Center Type
- Hyperscale data centers built by and for the largest cloud and AI providers, account for the largest and fastest-growing share of construction, reflecting the scale of hyperscaler investment and the size of AI campuses.
- Colocation data centers built by providers that lease capacity to multiple customers including hyperscalers, are a large and growing segment, often serving as capacity for cloud and AI providers.
- Enterprise data centers built by companies for their own use, are a smaller and more mature segment, and edge data centers, smaller facilities located closer to users, are an emerging segment.
Hyperscale and colocation construction dominate the market and are the primary drivers of its growth, given the scale of AI-driven demand.
By Construction Scope
- Electrical and power infrastructure is the largest and fastest-growing scope, reflecting the enormous power requirements of AI data centers, and includes substations, transformers, switchgear, and backup generation.
- Mechanical and cooling systems increasingly liquid cooling for AI, are also a large and growing scope.
- Building and core-and-shell construction provides the structure while engineering and design, critical given the complexity of these facilities, is often performed by specialized firms.
The concentration of value and growth in electrical and mechanical scope, driven by the power and cooling intensity of AI, is a defining feature of the market.
By End User
- Hyperscalers including Amazon, Microsoft, Google, and Meta, account for the largest share of demand, sponsoring the largest projects and driving the market with their unprecedented capital expenditure.
- Colocation providers which build capacity to lease to hyperscalers and others, are a large and growing end user, effectively extending hyperscale demand.
- Enterprises building for their own use, are a smaller and more mature segment.
The concentration of demand among a small number of hyperscalers, and the growth of colocation serving them, defines the end-user structure of the market and its dependence on continued hyperscale investment.
Voice of Customer
Primary interviews conducted for this study consistently identified power and speed as the defining challenges, and electrical and mechanical scope as the heart of the work. Two representative perspectives are summarized below.
"Speed and power are everything. We are building at a scale and pace the industry has never seen, and the constraint is no longer capital, it is power availability, transformer and generator lead times, and finding contractors who can deliver a gigawatt campus on an aggressive schedule." — Head of data center development, cloud provider
"The scope has shifted dramatically toward electrical and mechanical. On an AI data center, the power and cooling infrastructure can dominate the project, and the winners are the firms that can self-perform or tightly coordinate electrical and mechanical work and prefabricate to compress the schedule." — Executive, data center construction firm
Analyst perspective
The U.S. data center construction market is, right now, the most explosive corner of the entire construction industry, and in our view it is being driven by a genuine technological shift, artificial intelligence, layered with a speculative intensity that has pushed construction starts from under USD 27 billion in 2024 to nearly USD 78 billion in 2025. The demand is real: the hyperscalers are committing capital at a scale that has no precedent, and the compute that AI requires has to be housed somewhere. But we would urge two notes of caution. First, this is a market defined less by buildings than by power and cooling; the electrical and mechanical scope of an AI data center can dwarf the shell, and power availability, not capital or even land, has become the true bottleneck, reshaping where and how fast these facilities can be built. Second, exponential curves do not last, and a construction market growing at these rates carries real risk of overbuilding if AI demand disappoints or efficiency improves faster than expected. We expect very strong but potentially volatile growth, with power as the central variable, and we see the winners as the specialized contractors, particularly in electrical and mechanical scope, who can deliver gigawatt-scale, power-dense facilities at extraordinary speed.
Geographic analysis
Virginia Data Center Construction Market
Virginia is the largest state market for data center construction anchored by Northern Virginia, the largest data center market in the world. The region, centered on Loudoun County and often called Data Center Alley, hosts an enormous concentration of data centers, built up over decades because of its connectivity, power, and proximity to the internet's backbone, and construction continues at a rapid pace to serve hyperscale and colocation demand. The scale of the existing market and continued development, despite growing constraints on power and land, make Virginia the largest market for data center construction. Power availability and community considerations are increasingly shaping the pace and location of new development in the state, but Virginia remains the leading hub.
Texas Data Center Construction Market
Texas is a leading and fast-growing state market driven by power availability, land, and business environment. The state's large and relatively independent power grid, abundant land, and favorable business climate have made it a magnet for data center development, including very large AI campuses, and major projects such as the Stargate initiative are being developed in the state. Markets including Dallas, Austin, and San Antonio are growing rapidly, and the state's ability to provide power at scale is a key advantage as power becomes the binding constraint elsewhere. The combination of power, land, and policy makes Texas one of the largest and fastest-growing markets for data center construction.
Georgia and the Southeast Data Center Construction Market
Georgia and the broader Southeast are large and fast-growing markets driven by rapid growth around Atlanta and favorable conditions. Atlanta has emerged as one of the fastest-growing data center markets in the country, attracting hyperscale and colocation development, and other southeastern states are seeing growing activity. The region's power availability, land, connectivity, and incentives have driven rapid construction, and the growth of AI-driven demand is accelerating development. The rapid emergence of Atlanta and the Southeast as a major data center hub makes the region one of the fastest-growing markets for construction.
Arizona, Ohio, and Other States Data Center Construction Market
Arizona Ohio, and other states account for a significant and growing share of the market. Arizona, centered on Phoenix, is a major and growing market with strong hyperscale and colocation development, while Ohio, around Columbus, has attracted major hyperscale investment. Other states, including Iowa, Nevada, Oregon, Illinois, and Louisiana, where Meta is building a large campus, are growing centers of data center construction, often chosen for power availability and incentives. As power and land constrain established markets, development is broadening to these and other states, making the geography of data center construction increasingly national and driven by the availability of power.
Competitive landscape
The U.S. data center construction market is served by a specialized group of general contractors, electrical and mechanical specialists, and engineering and design firms with deep data center expertise, alongside the hyperscalers and developers that sponsor projects. Competition centers on firms capable of delivering large, complex, power-dense facilities at speed, given the intense demand and schedule pressure. Participants compete on data center construction experience and track record, electrical and mechanical capability, ability to deliver at scale and speed, self-performance and prefabrication, workforce and supply-chain management, and relationships with hyperscalers and developers. The specialized nature and scale of the work concentrate the market among experienced firms.
A key competitive dynamic is the race to deliver capacity fast, favoring firms with the capability, capacity, and specialized electrical and mechanical expertise to build power-dense AI facilities at scale. Leading general contractors including Turner, DPR, Holder, Mortenson, Gilbane, Clayco, and others compete for the largest projects, often alongside specialized electrical contractors such as Rosendin, Faith Technologies, and Cupertino Electric, and mechanical contractors such as Southland Industries, with engineering and design from firms such as Corgan and Jacobs. Investment in prefabrication, self-performance, workforce, and supply-chain management is central to competition, and the emphasis on speed, scale, and specialized capability is decisive in a market where delivering power-dense capacity quickly is paramount.
Sustainability impact
Managing Surging Electricity Demand
Data centers are now one of the fastest-growing sources of electricity demand in the country, projected by the DOE and Berkeley Lab to rise from 4.4% of U.S. electricity in 2023 to as much as 12% by 2028. How data centers are designed and built, and how their power is sourced, will largely determine the emissions impact of this surge, and developers are increasingly integrating efficiency and clean-energy procurement from the design stage.
By building more efficient facilities and integrating clean and firm power, the industry can help manage the enormous growth in electricity demand from data centers and limit its associated emissions, a critical sustainability challenge.
Reducing Water Use in Cooling
Cooling can make data centers highly water-intensive, and as AI drives denser, hotter facilities, water use has become a material sustainability and community concern. Data center construction increasingly incorporates water-efficient and closed-loop cooling, including liquid cooling and air-cooled designs, and companies are setting water-positive and water-reduction targets for their facilities.
By designing and building data centers with water-efficient cooling, the industry reduces the strain on local water resources, an important consideration in water-stressed regions where many data centers are built.
Advancing Efficient and Low-Carbon Design
Because data centers operate for decades, the efficiency and carbon footprint designed into them at construction largely determine their lifetime environmental impact. The industry is advancing energy-efficient design, low-carbon construction materials, and increasingly liquid cooling and heat reuse, improving the efficiency and reducing the footprint of new facilities.
By building more efficient and lower-carbon data centers, the industry reduces the energy use and emissions of the digital infrastructure that underpins the economy, even as demand for that infrastructure grows rapidly.
Supporting Grid Investment and Clean Energy
The scale of data center power demand is catalyzing major investment in the electric grid and in new clean and firm generation, including renewables and nuclear. Data center developers are signing large power purchase agreements and, increasingly, funding new generation and grid infrastructure, accelerating investment in the energy system.
By driving investment in grid infrastructure and clean and firm energy, the data center boom can, if well managed, accelerate the modernization and decarbonization of the electricity system, though it also poses significant challenges for the grid.
Table of contents
13 chapters · 135 pages · click to expandFrequently asked questions
The U.S. data center construction market was valued at USD 50 billion in 2025 and is projected to reach USD 165 billion by 2036, at a CAGR of 11.0% from 2026 to 2036, from an exceptionally high base. The estimate reflects the engineering, construction, electrical, and mechanical work for data center facilities, excluding IT and server equipment.