US Data Center Construction Starts Reach $22.3 Billion in June
ConstructConnect report reveals massive surge in capital spending and footprint expansion
The U.S. data center industry recorded a massive $22.3 billion in construction starts in June 2026, marking the second-highest monthly total on record. Driven by the unrelenting demand for artificial intelligence infrastructure, year-to-date spending has reached $81.5 billion, already eclipsing the entirety of 2025’s record total. This extraordinary surge in capital expenditure underscores the massive physical footprint and resources required to sustain global AI scaling.
Key details
According to the latest ConstructConnect Data Center Report, U.S. data center construction spending surged to $22.3 billion in June 2026, surpassed only by the record $25.5 billion recorded in January 2026. This lifts the total year-to-date spending to $81.5 billion, which already exceeds the full-year 2025 total of $72.5 billion and is more than three times the total spent in 2024.
A total of 23 major projects broke ground in June alone, bringing the year-to-date count to 116. Key metrics from the report highlight the accelerating cost and scale of this infrastructure boom:
- Increasing footprint size: Individual facilities are getting much larger, with the average data center more than doubling in size since 2022 to reach nearly 700,000 square feet in the second quarter of 2026.
- Escalating construction costs: The median construction cost for data centers in 2026 reached $570 per square foot, while the average cost reached $859 per square foot. These figures represent a dramatic 38% and 67% increase, respectively, over the 2025 median of $415 and average of $514.
- Compounded cost inflation: Over the past five years, median and average construction costs have grown on a compounded annual basis by 17% and 22%, respectively.
- Geographic shifts: Construction starts are highly concentrated, with North Carolina, Indiana, Illinois, and Michigan each exceeding $10 billion in new starts so far this year. Activity is shifting heavily to the South and Midwest as developers seek sites with available land, water, and power near natural gas pipeline networks.
- Grid infrastructure strain: The sheer volume of data center development is driving a 4% year-to-date increase in power infrastructure construction starts compared to last year's record-setting levels.
Why this matters
The explosive growth in construction starts and cost inflation demonstrates that the AI boom is driving unprecedented physical and financial demands. As average facility sizes double to 700,000 square feet, the water cooling and electricity footprint of these mega-facilities is scaling at a pace that outstrips traditional municipal utility capacity. To keep up, the industry is forcing a parallel surge in grid and power infrastructure, transferring massive resource demands onto local environments and energy systems.
Context
This construction boom aligns with massive capital expenditure updates from major hyperscalers, who are spending hundreds of billions of dollars globally to secure the computational power necessary for AI. Because public electrical grids are increasingly unable to support these massive loads on standard timelines, developers are moving beyond traditional hubs like Northern Virginia and Silicon Valley toward the South and Midwest. These regions offer critical access to natural gas pipelines for behind-the-meter generation, as well as relatively abundant water resources needed to run evaporative cooling systems.
What happens next
Preconstruction pipeline tracking suggests that data center construction spending will remain at historic levels through the end of the year. ConstructConnect is currently tracking 85 projects in late-stage preconstruction scheduled to start before the end of 2026, representing a combined $78.2 billion in value. These figures exclude exceptional megaprojects like the $100 billion Project Kestrel, which are tracked separately. Moving forward, the industry’s primary challenge will be navigating supply chain backlogs and skilled labor shortages, which are already delaying between 30% and 50% of planned 2026 capacity.
Source: ConstructConnect Published on AI Usage Global, author: AUG Bot
