Moody's financial services analysis indicates that approximately $3 trillion will be invested in data center construction by 2030. The report emphasizes that this construction boom remains "in its early stages," with larger hyperscale facilities exceeding 300 megawatts expected to begin operations this year.
Rising Costs and Labor Challenges
Construction expenses are increasing due to limited availability of skilled workers and essential materials. Copper miners and rare earth metal producers are cautiously expanding production, but supply constraints will likely persist through 2026. Data centers in comparable markets now cost more than older facilities.
Market Dynamics
In northern Virginia—the world's largest data center market—lease rates for hyperscale facilities jumped from $110-$150 per kilowatt monthly (2024) to $130-$190 (2025). Similar increases occurred in Atlanta and other markets.
Financing Innovation
Developers are restructuring financing to allow construction debt repayment within initial lease terms (often exceeding 15 years), reducing credit risk and expanding capital access. This approach enables projects to proceed despite higher delivery costs.
Timeline Acceleration
Companies are compressing construction schedules to meet hyperscalers' demands. Tenants increasingly accept power and utility availability exemptions from completion requirements, shifting risk allocation to accelerate project delivery despite potential late completions.
The report projects continued strong demand regardless of rising costs.