Projections show tens of gigawatts and over $100 billion in construction by decade’s end, with global spending reaching trillions by 2030. For contractors, this sector is now a major market driving the next construction cycle. The boom is real, constraints are significant, and the firms adapting quickly will profit from this lasting shift.
Surety Bond Professionals is a family-owned and operated bonding agency with over 75 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.
Why Are These Projects Breaking the Billion-Dollar Mark?
Three converging forces are driving the escalation.
- AI training, large models, real-time inference, and GPU-heavy workloads demand enormous power and cooling. As reported by McKinsey & Company, forecasts suggest AI-ready capacity demand will grow at 30% or more annually, and data center power consumption will increase by 165% globally by 2030. That means larger campuses and far more complex MEP systems.
- Industries like online trading, gaming, streaming, autonomous vehicles, logistics, telemedicine, and AI-driven apps all depend on near-instant response. Such clients need facilities in the right locations, with the right power, fiber, layouts, and reliability, so their data gets where it needs to go almost instantly.
- Facilities are now planned at 50–300+ MW each, with certain hubs seeing double-digit growth year over year. That level of grid interconnection, redundancy, and backup generation pushes project scales to the billion-dollar range faster than traditional commercial work. This scale is often supported by broader infrastructure shifts, such as how IIJA funding is changing in 2025 to bolster the national power grid and fiber connectivity.
For builders, this growth means bigger contracts, longer programs, and clients who think in portfolios, not one-offs.
What Are the Challenges for Contractors?
If you’re considering entering this market, go in with your eyes open. The big-ticket opportunities come with high expectations and risk.
- The number one bottleneck is no longer finding land; it’s securing megawatts. With potentially long interconnection queues and substation lead times, conflicting pressures from clients seeking speed and from regulators and communities concerned about sustainability, and growing scrutiny of environmental and grid impacts, contractors must coordinate closely with utilities. They also need sufficient knowledge about electrical infrastructure design, renewable energy technologies, onsite generation, and battery storage.
- Data center clients are brutally schedule-driven. Delay the go-live, and you’re not just late—you’re burning lost revenue in the millions per day. Contractor pain points include:
- Long lead times for obtaining specialized components, such as switchgear, transformers, chillers, liquid cooling skids, generators, and so on.
- Inadequate pool of workers skilled in mission-critical specialized trades
- High exposure to liquidated damages tied to capacity milestones, not just substantial completion
“Good enough” procurement won’t cut it. You win with locked-in vendor relationships, prefabrication strategies, and real-time schedule/supply visibility.
- Additionally, with projects hitting $1–20B, owners, lenders, and insurers are laser-focused on:
- Design errors, commissioning failures, and downtime risk
- Fire, water, and equipment damage during build
- Cyber-physical and security vulnerabilities
For clients, quality control, testing, and documentation are non-negotiable. Contractors that can demonstrate robust QA/QC, redundancy testing, and integrated commissioning will find themselves on the short list.
- States and cities are beginning to ask hard questions:
- Are these campuses crowding out housing or manufacturing?
- Are they consuming too much water or cheap power?
- What’s the real local benefit beyond a handful of tech jobs?
Tighter zoning, community benefit requirements, and environmental review require teams that can manage permitting, stakeholder engagement, and transparent sustainability metrics.
What Are The Opportunities for Builders?
Clients want teams who’ve done it before and offer mission-critical specialization. If you can field dedicated mission-critical teams, invest in training, and document your performance, your value (and margins) climb.
Data Center projects reward prefabrication and industrialized construction, such as modular electrical rooms and skids, and prefabricated battery and generator enclosures. Industrialized construction methods cut months off the schedule and reduce on-site risk—exactly what clients will pay for.
The demand for massive, greener power is creating a hybrid space where data center developers, utilities, independent power producers, and governments collaborate on:
- New transmission and substations.
- Solar, wind, and storage paired to data centers.
- Demand response and flexible load solutions.
Contractors who can operate in this gray zone—understanding both engineering, procurement, and construction (EPC) and utility processes—are well-positioned to secure multi-phase, multi-year projects.
Why Contractors Can Be Optimistic
Several fundamentals suggest that the $1B data center boom is not a bubble in the traditional sense.
- Structural (not fad) demand. AI, cloud, streaming, fintech, logistics, and national security workloads are not going away. Even conservative forecasts show steady growth in hyperscale capacity and power use through 2030 and beyond.
- Capital is committed. Hyperscalers, infrastructure funds, and utilities are deploying massive, long-horizon capital.
- Regulation will shape, not stop, the market. Instead of killing projects, emerging policies are more likely to push cleaner power, better siting, and stronger community benefits. All of these require more sophisticated design and construction services—an upsell, not an end state.
- Technology is making projects more buildable. Advances in liquid cooling, controls, digital twins, and modularization are helping offset some of the power-density and schedule challenges, opening space for smarter, faster builders to differentiate.
- Premium on capable contractors. Not everyone can play. The barrier to entry—capital, expertise, safety culture, QA/QC, cyber, and physical security—is high. For firms that invest, the reward is a less crowded, higher-trust, higher-margin market.
What Should Contractors Do Now?
If you want in, or to grow your share, treat this like a strategic market, not an opportunistic one-off work:
- Build a mission-critical portfolio highlighting uptime-sensitive projects.
- Invest in specialized MEP, controls, commissioning, and prefab capabilities.
- Develop utility, AHJ, and community relationships in target regions.
- Tighten contract review, risk management, bonding, and insurance practices specific to data centers.
- Train your teams on security, documentation, and live-environment protocols.
Inside the $1B data center boom, the winners won’t just pour concrete and hang cable. They’ll act like partners in a new class of essential infrastructure: fast, reliable, resilient, and increasingly clean. For construction companies ready to operate at that level, the next decade looks very bright.
Call Us Today
Our surety bond professionals will help you grow your revenue by maximizing your surety capacity. Call us today!
Data Center Construction FAQ
What is driving the sudden surge in billion-dollar data center projects?
The primary drivers are the massive power requirements for AI (Artificial Intelligence), the need for ultra-low latency in sectors like fintech and autonomous logistics, and the shift toward “hyperscale” campuses that exceed 50MW in capacity.
Is the data center boom a temporary “bubble”?
No. Unlike traditional market cycles, this is driven by structural demand. AI, cloud computing, and national security workloads are permanent fixtures of the modern economy, with massive capital already committed by hyperscalers and infrastructure funds.
What are the biggest risks for contractors entering this market?
The most significant risks include high liquidated damages for schedule delays, specialized supply chain bottlenecks (like transformers and liquid cooling units), and the technical complexity of integrating massive onsite power generation.
How can builders differentiate themselves to win these contracts?
Clients prioritize contractors who offer “industrialized construction” (prefabrication and modular skids), have a proven track record in mission-critical QA/QC, and maintain strong relationships with local utilities and AHJs (Authorities Having Jurisdiction).
What role does sustainability play in new data center construction?
Sustainability is now a requirement for permitting. Successful projects often incorporate renewable energy pairings, demand-response solutions, and water-efficient cooling technologies to satisfy community and regulatory concerns.
