Construction of new data centres in the United States has experienced its first decline since 2020, despite the escalating demand for artificial intelligence computing capabilities. According to a Bloomberg report, developers are encountering significant delays related to permitting, zoning regulations, and the procurement of adequate power supplies. This slowdown comes even as major tech companies are reportedly preparing to sign electricity supply agreements.
Real estate brokerage CBRE Group reports a notable decrease in capacity under construction, falling from 6.35 gigawatts at the close of 2024 to 5.99 gigawatts by the end of last year. Gordon Dolven, CBRE’s data centre research director, suggests that these construction delays, coupled with advancements in long-distance networks, are prompting a shift in development away from traditional data centre locations such as Northern Virginia.
Dolven noted that there is growing interest in markets offering readily available land and power. The overall vacancy rate in primary markets has also plummeted to a record low of 1.4 per cent at the end of the year.
This combination of factors is encouraging investment beyond established hubs and reshaping the North American data centre market. As demand continues to surge, the industry will likely adapt by exploring alternative locations and streamlining the development process.
