Hyperscale Data Centers Ignite Construction Surge

Despite the lack of a universal definition for hyperscale data centers, many people view them as massive facilities that typically handle mission-critical workloads distributed across numerous servers. These buildings have collectively contributed to a data center construction boom, emphasizing the world’s substantial and growing dependence on technologies and the infrastructure supporting them.

Emerging Technologies Spurring Data Center Construction

When a February 2024 study examined the state of the global data center industry, the results revealed some of the primary drivers of the current construction boom. One finding was many of the largest hyperscale providers increasingly accommodate clients’ artificial intelligence applications and other computing-intensive requirements.

Additionally, estimates suggest a sixfold increase in data center construction over the next three years. However, those involved with such projects face numerous challenges in finding adequate space and power when building new locations or expanding existing ones.

The study’s data also indicated people can anticipate greener electricity options for data centers under construction. That is because 54% of respondents said their operational expenses increased in 2023, and 62% cited energy costs as the top factor causing the rise.

However, 73% of those polled indicated they plan to use renewable power. The study’s statistics also spotlighted solar as the option with the notable momentum so far, with 59% saying this energy type has the most data center traction.

Outside this report, a power industry professional speaking about Virginia mentioned data centers as a significant factor in increasing the state’s power needs. They expect the state’s power demand to rise by 85% in the next 15 years and mentioned data centers as one of two primary drivers.

That possibility means anyone planning to build hyperscale data centers or other types must evaluate numerous factors, including whether there is sufficient infrastructure to support such facilities. Even as emerging technologies such as artificial intelligence change how people use data centers, those tasked with creating them must follow well-established practices to determine which locations best meet present and future needs.

Data Center Boom Causing Concern Among Regulators

Regulators in some nations have rejected planning requests to build more data centers. Ireland is a good example, with authorities in the small country worried that increasing the number of facilities will strain infrastructure and cause widespread blackouts. That decision occurred due to findings that Ireland’s data centers added a power demand equivalent to 140,000 households, and the country lacked sufficient renewable energy infrastructure to accommodate them.

Decisions like these are not new, as evidenced by a 2019 decision in The Netherlands that banned new data center construction in Amsterdam for a year. However, even that relatively short-term restriction opened opportunities for other cities to capture larger market shares.

Since hyperscale data centers will likely be more resource-intensive than smaller facilities, those planning them must stay highly aware of broader industry trends. Some may make it prohibitively difficult to proceed with construction as scheduled, necessitating the selection of alternative locations or scaling back intentions.

Widespread Shortages Affecting Data Center Construction and Beyond

Projections put the data center construction market’s global worth at $371.7 billion by 2030, representing a substantial jump from its $215.2 billion value in 2022. However, a persistent labor shortage could dampen prospects or make building facilities on schedule more challenging.

Research also suggests labor-sourcing difficulties could affect operations for newly constructed facilities. One August 2024 study examined the unique construction-related obstacles impacting the data center industry and other growing sectors. Analysts explained that the global construction worker shortage restricts data centers, which often need employees with specialized engineering, mechanical, and plumbing skills to operate them.

The coverage indicated that challenges may persist even if data center projects have sufficiently large construction crews. One provided example displayed it can take up to 200 weeks to source high-voltage circuit breakers. Due to such obstacles, getting large and equipment-filled hyperscale data centers ready to open could prove especially difficult.

There is also usually no quick fix for such issues. Although executives can relieve supply chain stresses by expanding their networks, establishing fruitful relationships with more partners takes time.

Additionally, the labor shortage extends beyond data center construction, meaning virtually anyone managing a large or time-sensitive project may experience its ramifications. Issues could be particularly severe in areas with several extensive initiatives occurring simultaneously, enabling those with building site experience to take their pick of work.

One construction and real estate analyst said there was approximately a 25% gap in open positions versus those available to take them. Fast-track training programs, increased pay, and more accessible apprenticeship opportunities could make people more interested in gaining construction skills and applying them to future data centers.

Hyperscale Data Centers Becoming More Common

Those watching the data center industry to see how it changes over the next several years should prepare for continued rapid growth. Data released in April 2024 about hyperscale data centers found the total number surpassed 1,000 earlier in the year. Relatedly, the capacity of those facilities doubled in only four years.

What does the report’s data indicate for the future? Researchers examined the next four years, forecasting that up to 130 more hyperscale data centers will open annually. The analysts also cited generative AI as a factor causing newly opened facilities to operate on a large scale. Cloud computing was another aspect accelerating the growth. The study indicated three leading providers collectively account for 60% of hyperscale capacity. 

Additionally, the researchers’ database consisted of 440 hyperscale facilities in the planning, development, or fit-out stages. Another general trend identified through the study was hyperscale facilities opened in companies’ home countries were generally larger than those in international locations.

Hyperscale data centers opened over the next several years may also be closer to customers than ever. The professionals involved in this analysis clarified that, although core data centers are larger than ever, numerous smaller accompanying facilities push essential infrastructure closer to those who need it.

Hyperscale Data Centers Are in Demand 

This overview highlights why hyperscale data centers should remain highly necessary for the foreseeable future. However, those planning them must stay aware of the various construction challenges and regulatory issues that may make some aspirations harder to achieve.