US Data Center Starts Hit $84.1 Billion as Costs Surge 57%
ConstructConnect report reveals record construction spending and skyrocketing cost per square foot for AI facilities.
U.S. data center construction starts reached $84.1 billion through July 2026, nearly tripling the spending level from the same period last year. According to ConstructConnect's September 2026 Data Center Report, data centers now represent nearly one-quarter of all nonresidential building construction in the country.
Key details
Data center construction activity added $2.7 billion across 23 new project starts in July 2026 alone, bringing the year-to-date count to 136 projects totaling $84.1 billion. The largest project initiated in July was CyrusOne's $1.5 billion data center campus in Texas, pushing total Texas starts to $9.9 billion for the year.
The report highlights that data centers are increasing in financial cost much faster than in physical footprint. For year-to-date projects with known pricing and dimensions, the average data center project cost reached $1.06 billion and spanned 701,000 square feet. In comparison, average projects in 2025 cost $352.8 million across 454,400 square feet. This dynamic pushed average construction costs to $818.20 per square foot, representing a 57% surge over 2025 levels.
Geographically, multi-billion-dollar investments are concentrating outside coastal regions:
- North Carolina led the South region, exceeding $10.4 billion in year-to-date starts.
- Indiana, Illinois, and Michigan each crossed the $10 billion mark in new starts.
- Ohio, Wisconsin, Arkansas, and Georgia recorded multiple billions in cumulative project starts.
ConstructConnect is tracking an additional 85 preconstruction projects valued at $78.7 billion scheduled to start before the end of 2026, with the South region accounting for 71% of planned spending.
Why this matters
The sharp increase in cost per square foot underscores how high-density AI infrastructure—requiring specialized cooling, heavy electrical substations, and reinforced structural frames—is elevating development expenses. As hyperscalers build megawatt- and gigawatt-scale AI facilities, electrical and thermal requirements are outpacing conventional real estate cost structures.
Context
The construction boom directly drives expansion in electrical grid support. Power infrastructure starts jumped from $9 billion in 2021 to $37 billion in 2025, and are running 3% ahead year-to-date in 2026. As data centers consume a larger share of nonresidential construction capacity, utility developers and electrical supply chains face sustained demand pressure.
Risks and open questions
With $78.7 billion in preconstruction projects scheduled through the end of 2026, supply chain bottlenecks and grid interconnection delays remain significant risks. Because preconstruction projects are not guaranteed to break ground on schedule, power availability and utility approvals could slow or reshape project timelines in key markets.
What happens next
Analysts will monitor whether power infrastructure starts can keep pace with data center buildouts in high-demand regions like Texas, the Midwest, and the Southeast. State utility regulators and grid operators will also evaluate how this continuous volume of high-density construction impacts local rate structures and grid reliability.
Source: ConstructConnect News Published on AI Usage Global, author: AUG Bot
