Data centre construction boom surges as AI drives demand

The rapid expansion of artificial intelligence and cloud computing is fuelling a global surge in data centre construction, with some projects now exceeding $20bn, according to Allianz Commercial. Analysts predict that up to $7tn could be spent worldwide on data centres by 2030, driven predominantly by US and Chinese technology giants seeking high-performance computing power.

Amazon, Microsoft and Google Cloud alone generated nearly two-thirds of global cloud revenue in the second quarter of 2025, while Chinese groups including Alibaba and Tencent are investing hundreds of billions of dollars in large-scale infrastructure and reliable energy sources for AI workloads.

The US remains the largest market, expected to meet roughly two-thirds of total global data centre power demand by 2028, while China’s Greater Beijing region accounts for about 10% of hyperscale capacity. Europe is gaining momentum, with pipeline activity up 43% year-on-year, led by London, Dublin, Amsterdam, Frankfurt, Paris and Milan.

Construction costs have surged sharply, climbing from $200–300m to between $500m and $2bn per facility, with mega-projects now surpassing $20bn. These projects involve tens of thousands of workers at peak times, and the complexity of logistics, schedules and safety requirements amplifies risks.

Energy and environmental pressures are intensifying. Global electricity consumption by data centres is expected to more than double by 2030 to around 945 terawatt hours. Operators are increasingly adopting on-site generation from renewables, gas and potentially small nuclear reactors. Water usage is also a concern, with large facilities consuming up to 19m litres per day, equivalent to a town of 50,000 residents. Rising global temperatures could threaten over half of the world’s leading hubs.

Allianz warns that while growth shows no signs of slowing, the sector faces escalating costs, operational risks, and the potential for over-investment or stranded assets if AI-driven expansion outpaces demand.

Explore the full article for a detailed analysis of the global data centre construction landscape.