The global data center construction market is estimated to be valued at USD 72,760.6 Mn in 2025 and is expected to reach USD 126,713.7 Mn by 2032, exhibiting a compound annual growth rate (CAGR) of 8.2% from 2025 to 2032.
The data center construction market will see significant growth over the forecast period due to rapid growth in data traffic across the world on account of increased internet penetration, adoption of cloud computing , and big data analytics. The rising demand for efficient and scalable data storage from colocation providers and hyperscale operators is expected to drive the new data center construction market growth.
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AI Revolution and Generative AI Adoption |
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Global Supply Chain Disruptions and Material Shortages |
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AI plays an important role in modern data center construction by improving efficiency, design, and operations. It helps in site selection by analyzing data, optimizes architectural design for the efficient use of power and cooling, and predicts equipment needs based on forecasted workloads.
AI supports both, the integration with advanced cooling systems and energy-saving technologies. Upon completion of construction, further optimization by AI will come through real-time monitoring and predictive maintenance. Under the deal, KDDI and HPE will set up a rack-scale system powered by the latest NVIDIA Blackwell architecture on the NVIDIA GB200 NVL72 platform built by HPE. The data center will minimize its environmental impact by using hybrid cooling-air and liquid cooling.
In June 2025, HPE and KDDI Corporation announced a partnership to launch the Osaka Sakai Data Center by early 2026. The facility will support startups and enterprises with NVIDIA AI infrastructure for developing AI applications and training large language models (LLMs).
Data Center Construction Market Insights, By Enterprise Size: Large Enterprises Capture Majority of Market Share
By organization size, large enterprises accounted for a 54.7% market share in 2025, reflecting the demand from large enterprises for hyperscale and highly reliable data center infrastructure. Large corporations involved in the cloud services, BFSI, and IT sectors are investing actively in new facilities and expansions for accommodating the digital transformation, AI workloads, and low-latency applications.
SMEs comprise 45.3% market share, and their primary adoption consists of small or edge-focused data centers to support regional operations and localized IT workloads.
For instance, in January 2025, Infosys announced a raft of initiatives to expand enterprise cloud and connectivity capabilities-a strategic partnership with StarHub to offer cloud, cybersecurity, and ICT services; a Google Cloud center of excellence powered by Infosys Topaz; and an extended relationship with Microsoft that aims to help enterprises accelerate generative AI and Azure adoption.
Based on tier standards, the segment of tier 3 is projected to have the highest market share of 51.5% in 2025 because it offers a balance between scalability and reliability. Tier 3 data centers also provide higher levels of infrastructure resilience through redundant components such as servers, storage, power, and networking. These have multiple independent distribution paths serving the IT equipment to ensure continuity of operations in the event of equipment failures or routine maintenance activities. This highly scalable Tier 3 design allows seamless capacity expansion to support the growing computing and storage demands of businesses. Due to their modular architecture that incorporates hot-swappable components, they can be upgraded incrementally without any major overhauls.
This results in a redundant configuration translating to 99.982% availability, which is sufficiently high for mission-critical applications. Still, due to dual component redundancy instead of multiple levels, the total cost of ownership is notably lower than that of Tier 4 centers.
For example, in February 2025, Heijmans revealed plans for a new 11,000-square-meter data center in Haarlem, Netherlands, planned with a capacity of 10 megawatts. The facility will use modular construction, energy-efficient water recycling, and be heat-network-ready to reuse the waste heat for nearby homes.
By construction type, electrical construction is expected to hold the largest market share in 2025 due to its high utilization in powering high-density IT equipment and enabling redundancy systems. Electrical construction today is comprised of a number of advanced UPS systems, high-capacity power distribution units, and intelligent monitoring solutions that ensure optimum energy efficiency and uptime.
For example, AI-driven demand for data centre infrastructure has seen Schneider Electric invest in U.S. manufacturing. It announced a $700 million investment in the expansion and refurbishing of facilities across eight sites in March 2025 to extend its capability in support of the growing data center market.
By end-use, IT & telecom is expected to hold the highest share of 38.7% due to the explosive usage of data across the globe in 2025. Cloud, IoT, big data analytics, and 5G technologies are being widely used, and therefore, leading to an increase in the amount of digital data produced and processed worldwide. Hyperscale cloud providers are continuously scaling up their capacities while telecom operators are ramping up their edge infrastructure for low latency applications targeting consumers and enterprises alike. IT infrastructure and environments are being increasingly migrated to scalable and secure data centers owing to ongoing digital transformation initiatives across industries.
IT modernization initiatives with big data, AI, and advanced analytics require on-premise data centers for localized computing and data sovereignty needs. This is a robust growth opportunity for colocation providers and telehousing services too.
For example, in July 2025, Google announced to invest USD 6 billion to build a 1-gigawatt data center campus in Visakhapatnam, Andhra Pradesh, India, including USD 2 billion for renewable energy infrastructure to power the facility.
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North America is the leading regional market for data center construction, and is poised to hold 33.8% of the global market share in 2025. This region's leadership is supported by the heavy presence of major tech giants and cloud service providers; the U.S. holds the largest share within the region. Strong demand for cloud and connectivity services across enterprise sectors has driven substantial investments in physical infrastructure expansion. Leading corporations are undertaking large-scale projects to develop new facilities and expand their existing footprints.
For instance, in March 2025, Microsoft announced a USD 1.5 billion expansion of its data center operations in San Antonio, Texas, including the construction of multiple new data centers in Medina County. This expansion is aimed at supporting growing enterprise demand for cloud and connectivity services, particularly for Azure cloud services and AI applications, and reflects the broader trend of large corporations investing in physical infrastructure to meet increasing digital workloads.
Asia-Pacific is the fastest-growing regional market, with a global share of 26% anticipated in 2025. In this region, rapid digitalization, increasing internet penetration, and the growth of bandwidth-consuming applications are driving up demand for online services, prompting global data center operators to expand in developing Asian economies.
Countries like China, India, Japan, and South Korea have competitive advantages in terms of lower construction costs, tax incentives, and increasing consumer demand for cloud-based applications. Government initiatives such as Digital India and Made in China 2025 further underscore the strategic focus of the region. The countries in Southeast Asia are also going to emerge as important hubs on the back of stable economic growth, a growing middle class, and improving infrastructure.
In April 2025, China launched the world’s first commercial underwater data center off Hainan Province, using the ocean’s natural cooling to greatly cut energy use. This groundbreaking facility represents a major step forward in sustainable AI development.
Europe is expected to account for 26% of the data center construction market in 2025, driven by the modernization of existing facilities and increasing demand for energy-efficient and low-latency solutions. European operators are increasingly adopting sustainable construction practices, renewable energy integrations, and advanced cooling technologies to meet regulatory standards and client expectations.
For example, the European Commission in March 2024 adopted a delegated regulation providing for an EU-wide scheme to rate the sustainability of data centers. Part of the revised Energy Efficiency Directive, it requires data center operators to report KPIs for energy consumption, renewable energy usage, water consumption, and heat reuse.
The United States is the biggest contributor to North America's data center construction market, driven by strong demand for cloud services, enterprise digital transformation, and hyperscale infrastructure expansion. Major technology companies such as Amazon, Microsoft, and Google have been investing heavily in new campuses, adding capacity, and upgrading existing facilities to support AI, edge computing, and high-performance workloads.
For example, in August 2025, Alphabet's Google announced it will invest USD 9 billion over the next two years to build a new data center campus in Stillwater and expand its Pryor facility in Oklahoma. The investment is designed to help expand U.S. AI and cloud infrastructure, supported by education and workforce development programs.
China dominates the Asia-Pacific data center construction market share, supported by rapid digitalization, strong e-commerce growth, and government initiatives like Made in China 2025 and the National Big Data Strategy. Lower construction costs and abundant local talent make it attractive for both domestic and global operators to build hyperscale facilities.
For instance, China launched a cloud of 12 AI-enabled satellites into orbit in May 2025, in a mission that marked a significant development, placing it strongly in the emergent frontier of space-based computing.
India is among the fastest-growing data center markets in the world, particularly because of the Digital India initiative by the government, fast internet penetration, and expansion of cloud services. Competitive construction costs and tax incentives also attract significant foreign and domestic investment in hyperscale and edge data centers.
For instance, in September 2024, AdaniConneX announced plans to scale its capacity from 20 MW to 160 MW in Chennai and Mumbai over the next two to three years. Such instances are accelerating the data center construction market revenue.
| Report Coverage | Details | ||
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| Base Year: | 2024 | Market Size in 2025: | USD 72,760.6 Mn |
| Historical Data for: | 2020 To 2024 | Forecast Period: | 2025 To 2032 |
| Forecast Period 2025 to 2032 CAGR: | 8.2% | 2032 Value Projection: | USD 126,713.7 Mn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
DPR Construction Inc., Hensel Phelps Construction Co. Inc., Turner Construction Co., Holder Construction Company, and Balfour Beatty US |
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| Restraints & Challenges: |
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Organizations adopt cloud computing services; there is a corresponding rise in demand for data center capacity. Companies are shifting their computing and storage needs to the cloud to improve agility, accessibility, scalability and reduce costs as compared to maintaining their own on-premise infrastructure. This transition to the cloud has been a major driver of data center expansion by large public cloud providers such as AWS, Microsoft Azure, Google Cloud and others. These are building massive hyperscale data center campuses across the world to support their cloud platform growth. More capacity is always needed to meet the growing demand from businesses and consumers who are moving their IT workloads, applications, and data to the cloud. Cloud adoption will accelerate in the coming years as digital transformation becomes a priority for businesses.
For instance, in June 2025, Amazon announced A$20 billion (around USD13 billion) from 2025 to 2029 to expand its data center infrastructure across Australia.
The rise of edge computing and fifth generation cellular networks are driving new opportunities for data center construction market growth. Edge computing refers to placing computing, storage, and applications closer to the physical location where data is being generated and consumed rather than in centralized clouds. This distributed architecture is driven by the need for ultra-low latency and higher bandwidth for applications like augmented reality, autonomous vehicles, IoT, and industrial automation. Roll-out of 5G networks will enable more bandwidth-intensive applications that need edge infrastructure deployments. 5G offers super-fast data speeds and very low latency, which is crucial for things like self-driving cars. But to make this happen, we need data centers on the edge that are capable of handling and transferring data closer to users instead of depending on such centralized facilities.
The data center construction market is witnessing remarkable growth, fueled by the rapid expansion of cloud computing, artificial intelligence, and edge computing across industries. Accelerated digital transformation, driven by remote work trends and surging data generation, is prompting enterprises to significantly expand their infrastructure.
Despite this growth, the market faces several constraints. Strict environmental regulations, rising construction costs, and skilled labor shortages in key regions are creating challenges for project execution. Limitations in power infrastructure and prolonged permitting processes further contribute to delays and operational complexities for construction firms.
Regionally, North America remains dominant because of strong adoptions of cloud services and significant investments by hyperscale operators. The Asia-Pacific region has been emerging as the fastest-growing market, supported by rapid digitalization across developing economies, smart city initiatives by governments, and expanding ecosystems for e-commerce.
*Definition: Data center construction market involves designing, building and renovating facilities that house computer systems and associated components, such as telecommunications and storage systems. This includes constructing server rooms and buildings, as well as installing and configuring cooling systems, power infrastructure, security systems and monitoring tools. The growth of cloud computing, big data and IoT is fueling demand for new data centers and expansions of existing facilities, as companies need more physical infrastructure to store and process digital information.
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About Author
Monica Shevgan has 9+ years of experience in market research and business consulting driving client-centric product delivery of the Information and Communication Technology (ICT) team, enhancing client experiences, and shaping business strategy for optimal outcomes. Passionate about client success.
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