Data-centre builders are racing to adapt facilities for artificial intelligence (AI) workloads, but industry specialists warn that supply chains and power networks may not be keeping pace.
A new analysis from engineering and project consultancy Turner & Townsend identifies 2025 as an inflection point for the sector, as demand shifts from traditional, air‑cooled cloud facilities towards higher‑density, liquid‑cooled data centres optimised for AI. The firm’s Data Centre Construction Cost Index 2025–2026 compares construction costs per watt across 52 markets and, for the first time, quantifies a construction cost premium for AI‑capable sites.
Turner & Townsend found global cost inflation for traditional data centres averaging 5.5% in 2025. In the United States, comparing projects of similar IT capacity, the consultancy identified a 7–10% increase in construction costs for AI‑grade, high‑density facilities versus traditional builds – a gap it attributes to the greater technical complexity of advanced cooling, power and infrastructure requirements.
Survey respondents from the sector told Turner & Townsend that the biggest challenges are not cost alone but the readiness of local supply chains and power availability. Some 83% of industry leaders surveyed said local supply chains are not well prepared to support the advanced cooling techniques required for high‑density AI centres. Nearly half (48%) identified power availability as the primary obstacle to delivering projects on schedule, a concern that grows as AI facilities demand ever higher power density.
The report recommends clients re‑examine procurement models to bolster supply‑chain resilience and calls for innovation to deliver more energy‑efficient designs and to reduce the risk of power‑connection delays.
Regional cost variations remain pronounced. Tokyo and Singapore were the most expensive markets in the index, $15.2 (£11.61) and $14.5 (£11.08) per watt respectively, followed by Zurich at $14.2 (£10.85). Established data‑centre hubs in the US and Europe also feature in the top 15: Silicon Valley at $13.3 (£10.16) per watt, London $12.0 (£9.17) and Frankfurt $11.6 (£8.86). Turner & Townsend links these figures to both sustained local demand and generally higher construction costs in those cities.
The Turner & Townsend findings echo other market‑level forecasts. Construction data provider Barbour ABI projects UK spending on new data centres could rise to about £10bn a year by 2029, up from roughly £1.75bn today. Almost 100 data‑centre projects are currently in planning in the UK, driven by demand from AI applications and the Internet of Things.
Analysts say the transition to AI‑grade facilities will have knock‑on effects beyond construction budgets. High‑density builds require upgraded grid connections, more complex fire suppression and containment systems, specialised installation skills for liquid cooling and longer lead times for bespoke electrical and mechanical equipment. Policymakers and grid operators may also face pressure to accelerate planning and permitting processes and to coordinate grid reinforcements in data‑centre clusters to avoid bottlenecks.
Turner & Townsend data centres sector lead, North America Paul Barry said: “Data centres are increasingly at the forefront of many governments’ long-term policy ambitions and their significance is better understood and recognised – providing greater opportunities for clients in the sector. Yet our report highlights key challenges that must be addressed to avoid putting a brake on investment and the benefits of AI transformation.”
“Power availability remains a critical barrier, with long-lead times for grid connection the main constraint. There is also stronger competition than ever before for power due to both increased business and consumer demand placing added pressure on grids.
“Developers and operators must adapt quickly to the evolving market landscape. AI data centres are more advanced, larger, and by extension, costlier. They come with greater power demands and modern cooling solutions. Clients need to navigate the power conundrum with greater openness to off-grid design solutions, while also securing reliable supply chains capable of providing the technology and talent needed for this new wave of data centres.”
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