The rapid adoption of artificial intelligence has ceased to be just a software trend and has become a tough engineering and logistical challenge. According to the latest Data Centre Construction Cost Index 2025 report by Turner & Townsend, the data centre market is on the threshold of a structural change. By 2027, AI-optimised facilities are expected to already account for 28 per cent of the global market, forcing a radical overhaul of existing construction and energy standards.
The scale of the transformation is evident in order books. As many as three-quarters of the companies surveyed are currently running AI infrastructure projects, and nearly half of the respondents predict that these workloads will dominate their operations in just two years. This paradigm shift entails a move away from traditional air cooling. Although conventional racks are still the norm, the majority of the industry, 53 per cent, indicate liquid cooling as the preferred standard of the future. This technology, although currently costing 7 to 10 per cent more, is becoming essential with the power density required by modern processors. Significantly, closed water systems are growing in popularity, with their low resource consumption making it easier to obtain environmental permits in regions with restrictive water policies.
However, the industry is facing bottlenecks that could hamper this growth. Although supply chains for key components such as generators have temporarily regained stability, confidence in the timeliness of suppliers in the 2026 outlook remains worryingly low. The skills gap is proving even more challenging. Only 17 per cent of companies claim to have sufficient expertise in implementing advanced cooling systems, which, when juxtaposed with rising construction costs – projected to increase by 5.5 per cent per watt in 2025 – creates a risky mix. The most expensive markets consistently remain Tokyo, Singapore and Zurich.
However, access to energy is becoming the ultimate arbiter of where new developments are located. Power grid capacity is currently the biggest barrier for nearly half of developers. Data centres have to compete with industry and the residential sector for connection power, forcing operators to find creative solutions. Microgrids, on-site power generation and experiments with hydrogen are gaining prominence. As Chris Gorthy of DPR Construction points out, it is the availability of power today that dictates where and when the first shovel will be driven in, forcing the sector to balance the growing demand for data with the need to minimise environmental impact.
