US Data Center Construction Market Size Likely to Grow at a CAGR of 8.7% By 2033

As per the current market research conducted by the CMI Team, the US Data Center Construction Market size is expected to record a CAGR of 8.7% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 41,475.8 Million. By 2033, the valuation is anticipated to reach USD 87,874.1 Million.

US Data Center Construction Market: Growth Factors and Dynamics

• Increased Demand for Cloud Services and Digital Transformation: The proliferation of cloud computing, IoT (Internet of Things), and AI (Artificial Intelligence) is driving the need for more data storage and processing capabilities. Enterprises are increasingly migrating to cloud-based services, necessitating the construction of new data centers to support this demand.

• Rise in Colocation Services: Many businesses prefer colocation services to avoid the high capital expenditures associated with building and maintaining their own data centers. This trend is fueling growth in the construction of colocation data centers, which provide shared facilities for multiple organizations.

• Advancements in Data Center Infrastructure: Innovations in data center design and infrastructure, such as modular data centers and advanced cooling solutions, are enhancing efficiency and scalability. These advancements are making it easier and more cost-effective to construct and expand data centers.

• Regulatory and Environmental Considerations: Increasing regulations related to data privacy, security, and environmental sustainability are influencing data center construction. There is a growing emphasis on building green data centers that utilize renewable energy sources and energy-efficient technologies to reduce carbon footprints.

• Strategic Geographic Location: The US has numerous strategic locations for data centers due to factors such as reliable power supply, favorable climate conditions, and proximity to major business hubs. Regions like Northern Virginia, Silicon Valley, and Dallas-Fort Worth are popular for data center construction due to their connectivity and infrastructure.

• Investment and Economic Incentives: Significant investments from tech giants like Google, Microsoft, and Amazon in building hyperscale data centers are driving the market growth. Additionally, various states offer tax incentives, grants, and other economic benefits to attract data center construction projects, further stimulating market expansion.

• Edge Computing and 5G Deployment: The rollout of 5G networks and the increasing adoption of edge computing are driving the need for data centers closer to end-users to reduce latency and improve performance. This trend is leading to the construction of smaller, distributed edge data centers across the US, complementing traditional large-scale data centers and further fueling the market growth.

US Data Center Construction Market: Partnership and Acquisitions

• In 2024, AGM Group Holdings Inc., a technology company, partnered with RED DOT ANALYTICS PTE. LTD. to build AI hyper-connected, GPU-driven data centers. This collaboration combines AGMH’s technology expertise with RDA’s AI services to develop advanced infrastructure supporting AI applications and workloads.

• In 2023, H5 Data Centres is expanding its downtown San Antonio edge data center, adding up to 340 cabinets and 1.5 MW of UPS capacity. The Tier III expansion aims to enhance colocation services, attracting five new telecom operators to bolster the network-rich ecosystem.

Report Scope

US Data Center Construction Market: COVID-19 Analysis

The COVID-19 pandemic has significantly impacted the US Data Center Construction Market, with the industry experiencing both positive and negative effects. Here are some of the key impacts:

• Project Delays and Disruptions: The pandemic led to significant delays in data center construction projects due to supply chain disruptions, labor shortages, and restrictions on movement. Many construction sites faced interruptions, leading to extended project timelines and increased costs.

• Increased Demand for Digital Infrastructure: While construction projects faced delays, there was a surge in demand for digital services due to the shift to remote work, online education, and increased internet usage. This heightened demand put pressure on existing data center infrastructure, highlighting the need for future expansion and upgrades.

• Acceleration of Digital Transformation: The pandemic accelerated digital transformation across various industries. Organizations have increased investments in IT infrastructure, cloud services, and data centers to support remote work, digital services, and e-commerce, driving new construction projects.

• Government Support and Incentives: Government initiatives and economic stimulus packages have provided financial support to the construction industry. Tax incentives, grants, and relaxed regulations have encouraged investment in data center projects, aiding the recovery of the market.

• Adoption of Modular and Prefabricated Data Centers: To mitigate future disruptions, there has been a shift towards modular and prefabricated data center solutions. These approaches allow for faster deployment, scalability, and reduced reliance on on-site construction activities, enhancing resilience against similar crises.

• Enhanced Health and Safety Protocols: The industry has adapted by implementing stringent health and safety protocols at construction sites. Measures such as social distancing, regular health checks, and enhanced sanitation have allowed construction activities to resume more safely and efficiently.

• Investment in Edge Data Centers: The increasing demand for low-latency services and the rise of technologies like 5G have driven investments in edge data centers. These smaller, decentralized facilities are often quicker to build and deploy, helping to meet immediate demand while larger projects recover and ramp up.

In conclusion, the COVID-19 pandemic has had a mixed impact on the US Data Center Construction Market, with some challenges and opportunities arising from the pandemic.

List of the prominent players in the US Data Center Construction Market:

• Turner Construction Company
• Holder Construction Group LLC
• DPR Construction
• Mortenson Construction
• Whiting-Turner Contracting Company
• Structure Tone
• Hensel Phelps Construction Co.
• Gilbane Building Company
• Clark Construction Group LLC
• JE Dunn Construction Group
• Fortis Construction Inc.
• AECOM
• McCarthy Building Companies Inc.
• The Walsh Group
• Balfour Beatty Construction US
• Others

The US Data Center Construction Market is segmented as follows:

By Infrastructure Type

• Electrical Infrastructure
• IT Infrastructure
• PD and Cooling Infrastructure
• Mechanical Infrastructure
• General Construction
• Others

By Tier Standards

• Tier I
• Tier II
• Tier III
• Tier IV

By Data Center Type

• Enterprise Data Centers
• Colocation Data Centers
• Hyperscale Data Centers
• Edge Data Centers
• Others

By End-User Industry

• IT and Telecommunications
• BFSI (Banking, Financial Services, and Insurance)
• Government
• Healthcare
• Energy
• Retail
• Others