Data center construction hit $14 billion in July 2025 alone. That’s up from $682 million in July 2024—a 1,952% jump in twelve months.
I’ve been tracking construction spending patterns for years. Nothing prepared me for this velocity.
Data centers are just the visible edge of a larger shift. Across energy infrastructure, transportation, and tech, billion-dollar megaprojects have gone from rare to routine.
The Megaproject Multiplication
Four years ago, billion-dollar construction projects were rare. The industry saw maybe four to five per year.
Now we’re seeing three to four per quarter.
That’s a 200% increase in frequency. Tech giants are driving the surge: Amazon committed $100 billion, Microsoft $80 billion, Google $75 billion, and Meta $65 billion for 2025 AI infrastructure.
Where the Cracks Show
Scale doesn’t just increase risk—it compounds it exponentially.
Labor shortages persist from the 2008 recession. The industry needs 439,000 additional workers this year beyond typical hiring rates. Supply chains remain pressured. Mid-build design changes multiply.
Then there’s social inflation.
A bodily injury claim today costs two to three times what it did five years ago. Social inflation increased liability claims by 57% over the past decade, hitting a 7% annual peak in 2023.
Third-party litigation funding and aggressive plaintiff advertising drive “nuclear verdicts” across the insurance system.
The Capacity Problem
A $10 billion data center project needs enormous capacity. No single market can provide it.
Individual insurer lines have shrunk from as much as $25 million to as little as $10 million. A single insurer typically accounts for just 15% to 35% of capacity on major projects over $100 million.
The rest gets filled through quota-share arrangements across multiple carriers.
Property insurance capacity is constrained for projects in catastrophe-prone areas. Casualty pricing remains competitive for certain project types, but the fragmentation is real.
Strategic Restraint Emerges
Here’s what surprised me most.
Some contractors are walking away from billions in data center work. They’ve watched too many peers overextend on boom cycles, then collapse when markets correct.
They’re maintaining balanced portfolios instead of chasing every project. The message is clear: this growth rate isn’t sustainable, and smart money knows it.
What Changes Now
Contractors, brokers, and insurers must collaborate earlier. Some insurers are creating specialized infrastructure teams combining underwriting, risk engineering, and claims experts.
Projects need risk management from design through decommissioning.
Relationships and specialized expertise separate winners from losers.
The industry is placing trillion-dollar bets that it can manage risks at scales it’s never handled before. I’m watching to see if the infrastructure supporting these megaprojects can scale as fast as the megaprojects themselves.
Right now, I’m not convinced it can.