The Money Behind the Megawatts
Data center construction spending in the United States has reached a level that would have been considered science fiction a decade ago. According to the latest figures from JLL, CBRE, and Cushman & Wakefield, total U.S. data center construction investment hit $28.5 billion in 2025 and is projected to reach $32 billion to $36 billion in 2026. For context, that is roughly equivalent to the entire U.S. hotel construction market and more than double the spending on laboratory and life sciences construction.
These are not estimates pulled from thin air. They are derived from actual permits filed, contracts awarded, and capital expenditure disclosures in public company filings. The four hyperscale operators — Microsoft, Google, Meta, and Amazon — collectively account for roughly 70 percent of this spending, with the balance split among colocation providers like Equinix, Digital Realty, CyrusOne, and QTS, plus a growing number of AI-focused startups building their own purpose-built facilities.
For the construction industry, this concentration of capital creates a unique dynamic. A relatively small number of end-users are driving enormous demand for construction services, and they are doing so with timelines and quality expectations that strain the industry's capacity at every level — from general contractors to MEP subcontractors to specialty commissioning firms.
Microsoft — The $14 Billion Gorilla
Microsoft has committed to spending approximately $14 billion on data center construction in the United States in fiscal year 2026, making it the single largest data center builder in the country by a wide margin. This figure, disclosed in the company's most recent earnings call, represents a roughly 40 percent increase over the prior year and reflects the massive computational requirements of the company's Azure cloud platform and its AI partnership with OpenAI.
Microsoft's construction program spans at least 12 states, with major campuses under development or expansion in Virginia, Arizona, Texas, Indiana, Wisconsin, and Georgia. The company has moved aggressively to secure land and power in emerging markets, often committing to projects years before construction begins in order to lock in utility interconnection agreements.
The scale of Microsoft's individual projects is staggering. The company's Indiana campus alone represents a $3.3 billion investment that will require 2,000 to 3,000 construction workers at peak. Its Arizona expansion will deliver over 500 megawatts of IT capacity across multiple phases. And its Virginia operations continue to grow despite the well-documented power constraints in that market.
For general contractors, Microsoft is typically among the most demanding but also among the most organized clients. The company uses a standardized data center design that it has iterated over multiple generations, which provides some construction efficiency but also requires strict adherence to specifications. Microsoft generally works with a relatively small group of trusted GC partners, including Holder Construction, DPR Construction, and Hensel Phelps, though the sheer volume of work has forced the company to expand its contractor base.
Microsoft's Construction Approach
Microsoft operates what it calls a "cloud supply chain" organization that manages its global data center construction program with a level of sophistication more commonly associated with manufacturing than construction. The company maintains detailed cost benchmarks — currently averaging $8 to $10 million per megawatt for new construction, depending on location and configuration — and uses these benchmarks to negotiate contracts and evaluate contractor performance.
The company has also invested heavily in modular and prefabricated construction methods, pre-assembling mechanical and electrical systems in factories and shipping them to job sites for installation. This approach reduces on-site labor requirements and compresses construction timelines, though it requires contractors to adapt their workflows and sequencing.
Google — $8 Billion and Accelerating
Google's parent company Alphabet has committed approximately $8 billion to U.S. data center construction in 2026, with major projects underway in Virginia, South Carolina, Indiana, Texas, Nebraska, and Nevada. Google's construction program is notable for its emphasis on sustainability and its willingness to invest in novel cooling technologies and on-site renewable energy generation.
Google's approach to construction differs meaningfully from Microsoft's. Where Microsoft has standardized heavily, Google tends to customize its facilities more aggressively, which can create both opportunities and challenges for contractors. Google's mechanical systems, in particular, are often highly customized, incorporating proprietary cooling designs that require specialized installation skills.
The company's $2 billion Fort Wayne, Indiana campus and its $600 million Douglas County, Georgia expansion are among the most significant projects currently under construction. Google has also invested in dedicated power generation assets, including a partnership with Kairos Power for small modular nuclear reactors that could eventually provide carbon-free electricity to its data centers.
Cost per Megawatt
Google's cost per megawatt tends to run slightly higher than the industry average, typically in the $10 to $12 million range, reflecting the company's customized designs and emphasis on sustainability features. This premium translates directly into higher contract values for the general contractors and MEP firms that win Google work.
Meta — $6 Billion in Focused Bets
Meta's data center construction spending of approximately $6 billion in 2026 is concentrated in fewer, larger projects than either Microsoft or Google. The company tends to build massive, single-campus facilities rather than distributing capacity across many smaller sites, which creates enormous but geographically concentrated construction demand.
Meta's $800 million Temple, Texas campus and its major expansions in Papillion, Nebraska and New Albany, Ohio represent the core of its current construction program. The company has also announced projects in Louisiana and Kansas, though these are in earlier planning stages.
Meta's construction approach is characterized by scale and repetition. The company builds very large individual buildings — often 500,000 to 900,000 square feet — and replicates its proven designs across campuses. This creates efficiencies for contractors who become familiar with Meta's specifications, though the sheer size of each building presents structural, mechanical, and logistical challenges that differ from smaller facilities.
Workforce Impact
Meta's campus-style approach means that each project creates a concentrated demand spike for construction labor. A typical Meta campus buildout requires 3,000 to 5,000 construction workers at peak, which can overwhelm local labor markets — particularly in smaller metro areas like Temple, Texas. The company has responded by offering premium wages (typically 20 to 30 percent above prevailing rates for key trades) and by working with unions and contractor partners to recruit workers from broader geographic areas.
Amazon Web Services — The Quiet Giant
Amazon does not break out its data center construction spending in the same way that Microsoft and Google do, but industry analysts estimate that AWS is investing $6 billion to $8 billion annually in U.S. data center construction. The company's projects are concentrated in Virginia (where AWS has the largest data center footprint of any operator), Ohio, Oregon, and increasingly in markets like Indiana and Mississippi.
AWS's construction program is notable for its speed and volume. The company builds data centers faster than any other hyperscaler, often moving from permit to operational facility in 12 to 18 months for its standardized designs. This speed is achieved through heavy use of prefabrication, standardized designs, and a deep bench of contractor relationships.
For a comprehensive view of how data center spending fits into the broader construction economy, our 2026 construction spending forecast shows that data centers now represent approximately 5 percent of total nonresidential construction spending — up from less than 2 percent in 2020.
The Cost Breakdown — Where Does $10 Million Per Megawatt Go?
Understanding data center construction costs requires breaking down the $8 to $12 million per megawatt that hyperscale operators typically spend. While exact breakdowns vary by design and location, a representative cost structure looks roughly like this:
Electrical Systems: 35-40% of total cost. This includes medium-voltage switchgear, uninterruptible power supply (UPS) systems, power distribution units (PDUs), backup generators, and the associated cabling and busway. Electrical systems are the single largest cost category in data center construction, which is why electricians command the highest premiums in these projects.
Mechanical Systems: 25-30% of total cost. Cooling represents the second largest cost category, encompassing chillers, cooling towers, computer room air handlers (CRAHs), piping systems, and increasingly, liquid cooling infrastructure for high-density AI computing. The shift toward liquid cooling is changing the mechanical cost profile significantly.
Shell and Structure: 15-20% of total cost. The building envelope, structural steel, foundations, and site work represent a smaller share of total cost than in most commercial construction projects, reflecting the relatively simple architectural requirements of data centers.
Controls and Commissioning: 5-8% of total cost. Building management systems, environmental monitoring, fire suppression, security systems, and the extensive commissioning process required before a data center can be energized represent a growing share of project costs.
General Conditions and Soft Costs: 10-15%. Permits, design fees, insurance, project management, temporary facilities, and the general conditions associated with managing a large construction project round out the budget.
What This Means for Construction Firms
The data center construction boom presents an extraordinary opportunity for construction firms at every tier, but capitalizing on it requires understanding the unique dynamics of this market.
For General Contractors
The GC market for data center construction is dominated by a relatively small group of firms — DPR, Holder, Hensel Phelps, Turner, Mortenson, and a handful of others — that have deep relationships with the hyperscale operators. Breaking into this market requires either acquiring data center expertise through hiring or acquisition, or entering through the colocation segment where barriers to entry are lower.
For MEP Subcontractors
Mechanical, electrical, and plumbing subcontractors are the most critical — and most constrained — resource in data center construction. Electrical contractors with experience in medium-voltage systems and UPS installation are particularly in demand, with backlogs extending 12 to 18 months in some markets. HVAC contractors with chiller and cooling tower experience are similarly constrained.
For Specialty Trades
Commissioning agents, fire protection engineers, controls integrators, and concrete contractors with experience in heavy slab work all face strong demand from the data center sector. These specialties often command premium rates 15 to 25 percent above their rates for other commercial work.
Wage Premiums
The concentrated demand for skilled trades in data center construction markets has pushed wages significantly above prevailing rates. Electricians working on data center projects in Virginia and Texas are commanding $45 to $65 per hour for journeymen, with overtime rates that can push weekly earnings above $3,000. These premiums are discussed in detail in our analysis of the construction workforce gap.
The Colocation and Wholesale Market
While the hyperscale operators dominate the headlines, the colocation and wholesale data center market represents another significant layer of construction spending — roughly $6 billion to $8 billion in 2026.
Colocation operators build multi-tenant facilities where multiple customers share a building's power, cooling, and physical security infrastructure while maintaining their own computing equipment. The largest colocation operators — Equinix, Digital Realty, CyrusOne (KKR), QTS (Blackstone), and CoreSite (American Tower) — each maintain active construction programs across multiple markets.
The construction dynamics of colocation facilities differ from hyperscale in several important ways. Colocation facilities tend to be smaller (50,000 to 200,000 square feet vs. 200,000 to 500,000 square feet for hyperscale), located closer to urban centers (for customer proximity and connectivity), and designed for higher tenant density. They also tend to use different contractor relationships — colocation operators often work with regional GCs and MEP firms rather than the national firms that dominate hyperscale work.
For construction firms that find the hyperscale market too competitive or too concentrated, the colocation segment offers a viable entry point. The projects are smaller and more manageable, the clients are more numerous, and the barriers to entry are lower. Successful colocation work can serve as a stepping stone to larger hyperscale opportunities.
The wholesale segment — purpose-built facilities leased to a single tenant — bridges the gap between colocation and hyperscale. Wholesale projects are typically built by developers like Compass, Vantage, and Stream to specifications provided by hyperscale or large enterprise tenants, and they represent some of the most active construction programs in the data center market.
Looking Ahead
The $28.5 billion data center construction market is not a bubble. The fundamental demand drivers — AI computing, cloud migration, and digital transformation — show no signs of slowing. If anything, the deployment of increasingly large AI models is accelerating the demand for computing capacity and, by extension, the physical infrastructure to house it.
For the construction industry, the question is not whether data center work will continue to grow, but whether the industry can scale its workforce and supply chains fast enough to capture the opportunity. The firms that invest now in building data center expertise — whether through training programs, strategic hires, or deliberate pursuit of data center contracts — will be best positioned to participate in what may be the most significant sustained construction boom in any single building type since the interstate highway system.
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