U.S. Data Center Construction Market Shows Strong Growth Trajectory
The U.S. data center construction market is experiencing robust expansion, with a Compounded Annual Growth Rate (CAGR) of 11.69% projected during the period of 2023-2029, according to the latest research report by Arizton. The market size is expected to reach USD 47.72 billion by 2029, up from USD 24.59 billion in 2023.
The surge in demand for data storage and processing capabilities is a primary driver of this growth, as major players in the tech, real estate, and infrastructure sectors invest significantly in building and upgrading data centers. This trend is fueled by ongoing digital transformation and the increasing adoption of cloud and edge computing technologies. Businesses are increasingly relying on data centers to power essential technologies such as 5G, IoT, and AI, further boosting investment in this sector.
Key hubs for data center development have emerged across the United States, with Northern Virginia leading as the renowned “Data Center Alley,” Silicon Valley maintaining its prominence, Dallas-Fort Worth becoming a significant hub in the Southwest US, and Chicago benefitting from its central location and robust network connectivity. These locations are expected to play a crucial role in driving the growth and expansion of the U.S. data center construction market.
Market Segmentation Insights
The report highlights that core and shell development will contribute the largest market share in the U.S. data center construction market, reaching over $9 billion by 2029. The Northeastern region is expected to witness a surge in brownfield projects due to location constraints, while air-based cooling techniques are projected to occupy a major share in the market, reaching $3.60 billion by 2029.
Mergers and acquisitions (M&A) and joint venture (JV) activities have also seen a notable increase in recent years, with companies exploring opportunities in cloud and edge computing and digital infrastructure. For instance, Amazon acquired a former insulation factory in Santa Clara, California, in March 2023, while Gigapower, LLC, a joint venture between AT&T and BlackRock, was formed in May 2023 to offer fiber broadband services.
The report covers various aspects of the U.S. data center construction market, including facility types, infrastructure, tier standards, and geography, providing insights on market size, growth drivers, upcoming trends, and challenges. The consolidation of key players, such as ABB, Caterpillar, AECOM, Amazon Web Services, Equinix, and Microsoft, reflects the dynamic nature of the market.
Looking ahead, the U.S. data center construction market is poised for continued growth, driven by evolving technologies and the increasing reliance on digital infrastructure. As businesses across industries continue to leverage data centers for their operations, investments in this sector are expected to escalate, shaping the future landscape of the market.
For more details on the U.S. data center construction market and to access the full report from Arizton, visit https://www.arizton.com/market-reports/united-states-data-center-construction-market-2024.