Data center construction hits record $75B pace as markets weaken
In brief
- Data center construction spending hit $75 billion annually in July 2026, up 57% year-over-year
- Data centers drove all nonresidential construction growth as office and residential sectors weakened
- Amazon, Google, Microsoft, and Meta signaled hundreds of billions in annual capital expenditure for expansion
- Pre-leasing rates on new data center facilities exceed 80% before construction completion
- Texas reports 1,800+ data center interconnection requests totaling over 474 gigawatts of capacity
AI Infrastructure Dominates Nonresidential Growth
Data centers have accounted for essentially all of the recent growth in nonresidential construction. Strip out the server farms and the nonresidential line would be flat to declining, dragged lower by continued weakness in traditional office space. The contrast is stark: while tech companies race to build out computational capacity, traditional real estate markets stall.
Full-year 2025 data center construction starts reached $77.7 billion, nearly tripling the 2024 total with a roughly 190% increase. The momentum shows no signs of slowing.
Tech Giants Drive Expansion
Amazon, Google, Microsoft, and Meta have each signaled capital expenditure plans in the hundreds of billions of dollars annually for data center expansion. These commitments reflect the infrastructure demands of large-scale artificial intelligence training and deployment. Pre-leasing rates on new facilities are running above 80%, which means tenants are locking in space before the concrete even sets.
The Grid Constraint
Every boom has its constraint, and for data centers that constraint is electricity. Power grid audits in Texas alone reveal more than 1,800 data center interconnection requests with a total projected capacity exceeding 474 gigawatts. To put that in context: the entire US electrical grid has roughly 1,300 GW of installed generating capacity today.
Interconnection delays are already a real problem. Getting a new data center plugged into the grid can take years in some markets. As demand outpaces grid readiness, power availability—not construction cranes or capital—may become the binding constraint on data center growth.
