The demand for data centers continues to grow rapidly as more companies become interested in artificial intelligence (AI) and digital offerings. In fact, the global market revenue for data centers is projected to reach $416 billion this year, according to Statista.
Furthermore, according to the recent Data Center Cost Index from Turner & Townsend, 80 percent of respondents surveyed believe the data center market is “recession-proof.”
However, costs continue to rise as tender prices for construction projects are expected to increase at a steady pace in the coming years. According to the survey, 58 percent of respondents said they saw rises of five to 15 percent in the past 12 months, and another 21 percent saw increases of greater than 15 percent.
According to the survey, most expect tender prices to continue rising at this rate over the coming 12 months, however, nearly one-third of respondents expect costs could slow down to about a five percent increase. The overall global average year-on-year cost increase across 2024’s index is nine percent vs. six percent in 2023.
In addition, data center developers are also worried about energy demands as competition grows and sustainability concerns increase. In the survey, 43.2 percent of respondents saw upgrading grid infrastructure and capacity as their first choice for addressing power constraints. Meanwhile, 24 percent had collaborating with local utilities for dedicated power arrangements as their first choice instead, among other options such as adopting advanced cooling technology (10 percent), using renewable energy (12 percent) or investing in on-site energy generation and storage solutions (10.8 percent).
With the AI boom, 92 percent of respondents saw AI as the technology that’ll have the biggest impact on data center operations in the next few years. Moreover, the top challenge pointed out by respondents for AI data center projects is managing increasing power and cooling demands.
Turner & Townsend obtained this data by conducting an online poll of experts from across the data center field. They also include benchmarking cost data taken from more than 300 live or previous projects in more than 20 countries.
Jeff Wardon, Jr., is the assistant editor for the facilities market.
