Tech companies such as Microsoft, Alphabet and Amazon are investing heavily in new expansion facilities to meet growing demand in the data center market.
In short – what you should know:
Datacenter spending reached $400 billion – US construction surged 30% year-on-year in June, reflecting unprecedented investment levels in digital infrastructure.
AI drives infrastructure demand – With the growth of AI and machine learning, hyperscalers such as Microsoft, Amazon, and Alphabet are increasing capacity at speed.
Energy is a challenge for the future – Data center growth, along with repurposing EVS and industry, will increase the demand for electricity, raising concerns for utilities and policymakers.
U.S. data center spending was registered on a $40 billion record in June, up 30% from last year, according to a new report from the Bank of America Institute.
Growth is driven primarily by artificial intelligence (AI) and machine learning, and requires a wide range of computing infrastructure. According to the report, tech companies such as Microsoft, Alphabet and Amazon are investing heavily in new and expanded facilities to meet these demands.
This surge follows a 50% increase in spending recorded in the same period in 2024. This trend reflects the continued restructuring of the digital infrastructure sector, the report added.
Nvidia is also a key beneficiary with GPUs widely used in AI training and reasoning. The increasing reliance on high-performance chips highlights the broader industry impact of data center build-outs.
The report also highlights broad concerns about rising electricity demand. Alongside the AI data center, power consumption is expected to increase due to the spread of electric vehicles, industry repurpose, building electrification, and new heating systems.
The rapid growth in US data center construction is expected to challenge utilities and policymakers as they work to balance infrastructure needs with sustainability and grid reliability, the report says.
According to JLL's mid-2025 North American Data Center Report, the North American data center sector is facing deeper supply crunch as vacancy rates hit record lows despite a surge in new developments.
The company warns that the market is reaching a “significant turning point.” It warns that demand, limited power and long build timelines are forcing operators and businesses to rethink their strategy.
Even if the installation capacity increased to 15.5 GW, colocation vacancy fell to just 2.3%. Northern Virginia continues to dominate at 5.6 GW, more than three times the 1.5 GW of Dallas and Fort Worth. According to JLL, cloud providers pushed 65% of their lease activities in the first half of 2025.
Going forward, JLL forecasts up to $1 trillion in North American data center investments from 2025 to 2030, potentially delivering capacity of over 100 GW. The current total planned development of 31.6 GW is led by Northern Virginia (5.9 GW), Phoenix (4.2 GW), Dallas-Fort Worth (3.9 GW) and Las Vegas/Reno (3.5 GW).
