The data center industry is experiencing unprecedented expansion. Construction spending reached a staggering $14 billion in a single month during summer 2025, with year-to-date totals already surpassing all of 2024. Average project costs have surged to $499 million, reflecting a 47% year-over-year increase in per-square-foot costs. This explosive growth isn’t slowing down—it’s accelerating, driven by artificial intelligence workloads that demand exponentially more computing power than traditional applications.
The Infrastructure Challenge Behind the Growth
Behind these impressive investment numbers lies a critical challenge: power and cooling infrastructure. Data center power needs in the United States are expected to add approximately 460 terawatt-hours of demand from 2023 to 2030—three times current consumption levels. This massive increase is straining regional power grids and forcing developers to seek locations where adequate electrical capacity exists or can be developed.
Major tech companies are committing unprecedented capital to address these infrastructure demands. Microsoft announced $80 billion for AI data center capacity in 2025. Amazon Web Services added $1 billion to an earlier $10 billion expansion in Ohio alone. The Project Stargate initiative represents up to $500 billion in joint investment over four years. These aren’t just impressive numbers—they represent a fundamental transformation in how digital infrastructure must be built and operated.
The investments extend beyond computing hardware. Power infrastructure construction starts totaled $10.7 billion through August 2025, supporting the development of transmission lines, substations, and backup power systems necessary to keep these facilities operational. Industry forecasts project power infrastructure spending will climb to over $30 billion annually by 2027, creating sustained demand for specialized infrastructure providers.
The Cooling Crisis: A $7 Trillion Problem
While securing adequate power represents one challenge, managing the heat generated by this computing power presents another equally critical issue. Currently, cooling infrastructure alone consumes approximately 40% of a data center’s total energy usage—an amount equivalent to California’s entire electricity consumption. With AI workloads expected to increase energy demand tenfold by 2026 compared to 2023, traditional air-based cooling systems are reaching their physical limits.
The numbers tell a compelling story. Data centers consumed 7.4 gigawatts of electricity in 2023, up 55% from the previous year. Goldman Sachs Research projects worldwide data center power demand will increase 160% by 2030. As AI models grow more complex and GPU clusters become denser, the thermal challenges intensify. Modern AI training clusters generate heat loads that traditional cooling infrastructure simply cannot manage efficiently.
The Liquid Cooling Revolution
The industry is responding with a fundamental shift from air to liquid cooling technologies. According to industry analyst Sean Graham, 22% of data centers now use liquid cooling techniques, and this percentage is rapidly expanding. Google’s implementation of liquid-cooled Tensor Processing Unit pods achieved a fourfold increase in compute density while maintaining system reliability. Microsoft announced that all new data center designs will utilize advanced liquid cooling systems, signaling the technology’s transition from experimental to essential.
Liquid cooling technologies deliver superior thermal management through several approaches. Direct-to-chip cooling targets heat removal at the source, while immersion cooling eliminates the need for traditional fans entirely and enables nearly 100% heat recapture. These systems don’t just manage heat more effectively—they dramatically reduce overall energy consumption, a critical factor when power availability constrains expansion.
Leading AI developer cloud provider Lambda recently selected a liquid-cooled facility in Plano, Texas for its operations, demonstrating how cooling infrastructure now drives site selection decisions. Investment firm Colovore raised $925 million in debt financing specifically for liquid-cooled infrastructure development, while Aligned Data Centers continues expanding its liquid-cooled hyperscale facilities across multiple markets.
Regional Expansion Creates Local Opportunities
The shortage of suitable sites in established markets is driving data center development into emerging and secondary locations. Southern states including Louisiana, Texas, and Virginia dominate near-term construction activity, with Illinois emerging as the Midwest leader. Average data center site sizes have grown to 224 acres in 2024, a 144% increase since 2022, as developers plan multi-building campuses with room for future expansion.
This geographic diversification creates opportunities for specialized infrastructure providers in markets that previously saw limited data center activity. Developers are actively seeking locations that can support the massive electrical loads required while providing access to skilled trades, reliable utilities, and favorable regulatory environments. The buildout isn’t limited to greenfield sites—existing facilities require substantial upgrades to support AI workloads and modern cooling technologies.
Why Industrial Cooling Expertise Matters Now
The data center industry faces a critical gap between ambitious expansion plans and the specialized infrastructure needed to support them. While computing hardware vendors receive significant attention, the mission-critical systems that keep those computers operational—power distribution, backup systems, and especially cooling infrastructure—often determine whether projects succeed or fail.
Organizations with deep expertise in industrial refrigeration and cooling systems are uniquely positioned to address these challenges. Data centers operate 24/7/365 with stringent uptime requirements where cooling system failures can cost millions per hour in downtime. The transition to liquid cooling requires specialized knowledge in thermal management, fluid dynamics, and precision temperature control—exactly the expertise developed through decades of industrial refrigeration work.
Consider the parallels: both industries demand reliable operation under continuous loads, require precise temperature control, involve complex piping and pumping systems, and depend on preventive maintenance to avoid catastrophic failures. The engineering principles that ensure a cold storage facility maintains consistent temperatures through Texas summers translate directly to keeping server racks at optimal operating temperatures while minimizing energy consumption.
The Path Forward
The data center boom represents more than just construction activity—it signals a fundamental transformation in digital infrastructure that will continue for years. With capacity constraints limiting traditional markets, vacancy rates at record lows of 1.9% in primary markets, and continued AI-driven demand growth, the industry needs partners who can deliver reliable, efficient cooling infrastructure at scale.
Success in this market requires more than just installing equipment. It demands understanding the unique thermal challenges of high-density computing, designing systems that balance performance with energy efficiency, providing rapid response when issues arise, and supporting long-term facility operations through ongoing maintenance and optimization.
The data center industry is investing trillions of dollars in new capacity. Behind every rack of servers, every GPU cluster, every AI training facility, there’s a critical need for cooling infrastructure that works reliably and efficiently. Companies with proven expertise in industrial cooling systems have the opportunity to become essential partners in building the digital infrastructure that will power the next generation of computing.
The question isn’t whether data centers will continue expanding—the investment commitments ensure they will. The question is which companies will emerge as trusted partners in addressing the infrastructure challenges that make this expansion possible. For organizations with deep cooling expertise, the time to engage this market is now.
Sources and Further Reading
- McKinsey & Company – The Data Center Balance: How US States Can Navigate Opportunities and Challenges
- Brookings Institution – The Future of Data Centers
- ConstructConnect – October Data Center Report: Spending Reaches $13B as Costs Rise
- ConstructConnect – September Data Center Report: Record Construction Spending Surges to $14B
- Cushman & Wakefield – Data Center Development Cost Guide 2025
- Data Center Frontier – Liquid Cooling Comes to a Boil: 2025 Midpoint Analysis
- Data Center Asia – Data Center Cooling Solutions in 2025: Challenges, Trends, and Innovations
- Carnegie Mellon University – Slashing AI Data Center Cooling Cost, GPU/CPU Power Use
- Iceotope Technologies via Data Center Frontier – Cooling the AI Revolution in Data Centers
- AIRSYS North America – Data Center Trends & Cooling Strategies to Watch in 2025
- McKinsey & Company – The Cost of Compute: A $7 Trillion Race to Scale Data Centers
