Data center construction has been a hot commodity in an increasingly tight economic environment. Fortune Business Insights reports that the global market size was valued at $275.16 billion in 2025 and projected to grow to $761.19 billion by 2034.
This rapid expansion has created numerous opportunities for construction companies to take advantage. But, with these projects come a few unique challenges.
What’s causing the data center construction boom?
While data centers themselves aren’t new, the recent boom in data center construction is. It’s being primarily driven by heavy investment in the technology industry, especially in the AI sector. As demand increases for products like ChatGPT and Claude or companies like Google and META unveil their own AI tools, the need for data centers also increases.
Obstacles to data center construction
There are several potential pitfalls that come with data center projects. But their causes vary.
Community pushback
The local impact of data centers is a significant factor in community pushback against data centers. These massive facilities are prone to straining infrastructure in some communities that may not be prepared for it.
Water usage
The servers in a data center generate a lot of heat, and to avoid overheating, data centers use water for cooling. However, some communities with older infrastructure often experience reduced water pressure or discolored water after data center construction, which also drives up utility costs and can deplete reservoirs.
Noise pollution
The generators and cooling systems that data centers use can often be quite loud, sometimes reaching as high as 85 to 100 decibels. This noise can create frustration for nearby residential communities.
Increased energy costs
Many communities face higher energy bills once a data center is constructed and looped into their energy grid. This is due to the expensive grid updates demanded by data centers and energy usage during peak operating hours.
Higher material prices
Higher material costs are a universal hurdle for construction projects today, and data centers are no exception.
In fact, the materials demanded for data center construction are especially susceptible to supply chain disruptions. Transformer and switchgear components often include relays, fuses, semiconductors, and circuit breakers that are manufactured in highly-specialized facilities and aren’t as widely available as raw materials such as concrete or steel.
While many of these components are present on normal construction sites, data centers demand significantly more of these materials than average builds, which drives up the potential for bottlenecks.
Infrastructure limitations
Due to the high energy demands of data centers, securing the utility grid capacity necessary for operation can be challenging. That means the electrical demands have to match the existing grid capacity, and water has to be available for cooling
If the baseline infrastructure doesn’t exist, it will either have to be built or the project won’t be able to move forward.
The future of data center construction
While challenges exist, data center construction remains a strong market in construction.
Furthermore, innovations in data center technology also have the potential to reduce pushback against new projects. For example, switching to reclaimed water for cooling rather than purified drinking water would negate issues that some communities face with water infrastructure.
Similarly, many data centers have switched to systems that are able to operate at higher temperatures, meaning they can be cooled with warmer water, which leads to greater energy efficiency.
Noise barriers, like those employed in residential communities alongside interstate highways, can also help to reduce noise pollution from data centers, and renewable energy sources can mitigate the strain that data centers put on energy grids.
As data center construction continues to grow, the industry will adapt new solutions to common obstacles.
About Raken
Whatever work you take on, Raken helps you streamline operations on the jobsite and mitigate the high costs of materials and labor with daily reports, production tracking, time tracking, and safety management. Set up a demo today so we can discuss your company’s needs.