Data Center Construction at Midyear: Demand, Friction, and Building Discipline

Data center construction is booming in 2026 as demand for AI infrastructure grows, but the industry faces significant challenges including power constraints, workforce shortages, and community resistance to new projects. Several states have begun imposing restrictions on data center expansion due to concerns about energy costs, environmental impacts, and grid reliability. The industry is responding by bringing insurance and risk experts into projects earlier, adopting more collaborative approaches with communities, and exploring alternative power sources like natural gas microgrids, fuel cells, battery storage, and geothermal energy to reduce strain on electrical grids.