According to TechRepublic, Turner & Townsend’s 2025-2026 Data Center Construction Cost Index reveals some alarming numbers about the AI construction boom. The report surveyed 280 industry experts across 52 global markets and found that 48% cite power availability as the main obstacle to meeting delivery schedules. Even more striking, 83% of experts believe supply chains aren’t equipped to deliver advanced cooling technologies for AI data centers. Construction cost inflation for traditional data centers is projected at 5.5% in 2025, while AI-ready facilities carry a 7-10% premium in the US. Tokyo leads as the world’s most expensive market at $15.2 per watt, followed by Singapore at $14.5 per watt and Zurich at $14.2 per watt.
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The Power Problem Is Real
Here’s the thing that really jumps out – nearly half of the experts surveyed say power availability is the single biggest challenge. We’re talking about the fundamental infrastructure that these massive AI data centers need to even function. And it’s not just about having enough electricity – it’s about having it where and when they need it. These facilities are power-hungry monsters that can consume as much energy as small cities. So what happens when the grid can’t keep up? Basically, we’re building Ferraris but only have bicycle lanes to drive them on.
Supply Chains Are Breaking
That 83% number should scare anyone investing in AI infrastructure. Think about it – the very companies building these advanced facilities don’t believe their suppliers can deliver the specialized cooling systems needed. AI chips generate insane amounts of heat, way beyond what traditional air cooling can handle. So we need liquid cooling systems, immersion cooling, all sorts of advanced thermal management. But if the supply chain can’t provide it, we’re looking at delayed projects, cost overruns, and maybe even facilities that can’t operate at full capacity. It’s like planning a gourmet dinner but your grocery store only sells canned beans.
The Price Tag Keeps Climbing
When you look at those construction costs, you start to understand why AI companies are burning through cash so quickly. A 7-10% premium for AI-ready facilities adds up fast when you’re talking about billion-dollar projects. And those numbers for Tokyo, Singapore, and Zurich? They’re absolutely brutal. But here’s what’s interesting – even traditional data centers are seeing 5.5% inflation. So it’s not just AI driving prices up, it’s the entire industry overheating. Everyone’s trying to build at once, and there simply aren’t enough contractors, materials, or skilled workers to go around.
What Happens Now?
Paul Barry from Turner & Townsend says developers need to embrace off-grid solutions and strengthen supply chains. But that’s easier said than done. Off-grid power means things like building your own substations or even on-site generation – which adds even more cost and complexity. And strengthening supply chains? That takes years, not months. The real question is whether the AI hype can survive the physical reality of construction limitations. We might be heading toward a situation where only the biggest players with the deepest pockets can actually build the infrastructure needed to compete. Everyone else might get priced out before the race even really begins. The full Data Centre Construction Cost Index makes for some sobering reading if you’re betting big on AI.
