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cash-online.de | Local Language | News | Nov. 12, 2025 | UndeterminedTech Development/Adoption

The global construction boom for data centers is being driven by the rapid growth of artificial intelligence and cloud computing, with investments expected to reach up to seven trillion US dollars by 2030. The USA and China are the primary markets for this expansion, while Europe is growing but still lags behind. Major technology companies, including Amazon, Microsoft, Google Cloud, Alibaba, and Tencent, dominate cloud revenue and invest heavily in new data centers and energy infrastructure. Project costs have escalated significantly, sometimes exceeding 20 billion US dollars.

The increasing scale of data center projects brings heightened risks for both construction companies and insurers. These facilities require complex, project-specific insurance due to their size and unique risk profiles. Energy consumption is a key concern, with data centers' electricity demand in the USA projected to reach 81 gigawatts by 2028, representing about two-thirds of global demand. China also hosts substantial hyperscale capacity, especially around Beijing, while Europe's planned project growth stands at 43 percent. Large-scale construction sites employ thousands of workers, and mistakes or poor execution can cause costly delays or losses.

Rising energy needs, water consumption, and fire hazards further complicate risk management. Data centers globally may consume around 945 terawatt hours of electricity by 2030, surpassing Japan's current use. To mitigate grid strain, operators are turning to renewable energy, gas plants, and small nuclear reactors. Cooling requirements are significant, with some centers using up to 19 million liters of water daily, matching the usage of a city with 50,000 residents. Climate factors and stricter cooling rules increase costs and outage risks, while lithium-ion batteries add fire risks.

Insurance demands are escalating alongside these trends, requiring multi-year, tailored solutions and expert sector knowledge. Insurance providers are essential partners throughout the entire construction and operation process. Despite uncertainties in the future pace of AI adoption, the current trajectory of data center market growth shows no signs of slowing, although it could be influenced by technological changes and adoption challenges.