Data center investment to hit $3 trillion

Global data center investment will reach at least $3 trillion over the next five years as construction costs rise and demand stretches resources, according to Moody’s Ratings, Construction dive reports.

Hyperscalers will drive double-digit capacity growth through at least 2026, but power shortages and escalating costs could delay project timelines.

Despite challenges, financing models are adapting and tenants are accepting more construction risks to accelerate delivery.

Data center boom still in early stages

Moody’s says the data center construction surge is still “in its early stages”. Hyperscale facilities exceeding 300 megawatts will start operating this year, dramatically expanding capacity.

Developers are compressing construction schedules to meet hyperscalers’ demands for faster market entry.

More tenants now accept exclusions for power availability from completion terms to speed up delivery.

Material shortages push up prices

Global shortages of skilled labor and critical materials continue pressuring costs. Copper miners and equipment manufacturers are gradually increasing output, but Moody’s warns additional supply won’t curb price increases in 2026.

In northern Virginia, the world’s largest data center hub, hyperscale lease rates jumped to $130-$190 per kilowatt monthly in 2025, up from $110-$150 in 2024.

Projects increasingly structure financing to repay construction debt within initial lease periods, typically longer than 15 years. This reduces credit risk and improves access to capital despite mounting costs.