Addressing Challenges In Data Center Construction: Risk Identification And Contractual Considerations

Abstract

Driven by the upsurge in customer data requirements and recent advancements in artificial intelligence, data center construction demands recently escalated rapidly. Data centers have garnered massive deployment capital from key technology players, with investment expected to reach $1.8 trillion from 2024 to 2030 to meet development needs. As the data center industry grows, numerous challenges and risks will affect data center construction projects, potentially hindering the progress of this industry. Given the industry's relative immaturity, limited research has addressed the challenges and risks in data center construction. Moreover, scholarly insights on the application of standard contract forms are scarce. This paper addresses this gap through a multi-stage research methodology. Initially, risks and challenges affecting data center construction are identified through a review of data center industry publications and litigations pertaining to data centers. Afterwards, natural language processing techniques are utilized to assess the alignment of applicable standard contract forms with the identified risks. The risk factors having the lowest similarity scores include economic uncertainties, power availability, labor management, and supply chain management. Moreover, several suggestions to account for such risks in data center contracts were provided.

Department(s)

Civil, Architectural and Environmental Engineering

International Standard Book Number (ISBN)

978-078448698-6

Document Type

Article - Conference proceedings

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2026 American Society of Civil Engineers (ASCE), All rights reserved.

Publication Date

01 Jan 2026

Link to Full Text

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