US Data Center Construction Surge Driven by AI Demand and Supply Chain Challenges

The construction of data centers in the United States is experiencing unprecedented growth, with spending projected to reach $45.1 billion by December 2025. This represents an 85% increase from two years prior, driven largely by the escalating demand for AI compute power.

According to estimates from Goldman Sachs, major tech companies including Amazon Web Services, Microsoft, Google, Meta, and Oracle are expected to invest approximately $1.15 trillion in capital expenditures from 2025 to 2027. This surge is fueled by the need for denser and more power-intensive hardware configurations compared to traditional cloud workloads.

Deloitte forecasts that AI data center power demand in the US will grow dramatically from 4 GW in 2024 to 123 GW by 2035, indicating a more-than-thirtyfold increase within a decade. However, the supply chain is struggling to keep pace with this rapid growth.

Building a data center requires various components such as gas turbines, transformers, switchgear, and specialized cabling, all of which are facing long production queues. Current US gas turbine production is around 10 GW annually, while transformer lead times have increased significantly, and switchgear manufacturers are operating at full capacity. Consequently, between 30% and 50% of planned data center capacity for 2026 may experience delays due to construction and electrical grid bottlenecks.

Interestingly, this boom in data center construction is benefiting industrial real estate, as each gigawatt of construction generates approximately 2 million square feet of demand for industrial and warehouse space. As of early 2026, the Americas had 25.3 GW of capacity under construction, with pre-commitment rates on new capacity nearing 89%. This means that nearly all new space is already leased before the first server rack is installed, leading to a vacancy rate of about 4.2%.

Site selection for new data centers is increasingly focused on the availability of power rather than traditional factors like tax incentives. States and municipalities that have invested in grid capacity are attracting more data center investments, while areas lacking such infrastructure are being sidelined, regardless of their competitive efforts in tax breaks or permitting speed.