Data center constructions to face mounting delays through 2027
12 Jul 2026

The global data center construction industry is facing major challenges, with project delays and cancellations on the rise.

A new report from Bernstein predicts that these issues will mount through 2027 as developers reassess their plans amid power, cooling, and supply chain constraints.

The firm also anticipates a wave of project delays in 2025-2026 that will keep available capacity tight in the near term.

Major bottlenecks in key US and European markets
Risk assessment

Bernstein's report highlights that while announced capacity remains high, the conversion to operational power is slowing down.

The firm estimates that 35-40% of this global capacity is at risk of delay or cancellation due to bottlenecks in grid connections, transformers, and liquid-cooling infrastructure required for AI servers.

These issues are most pronounced in key US and European markets.

Operators forced to look at secondary markets
Market dynamics

The Bernstein report also notes that "power availability, not capital, is now the primary gating factor" for new sites.

In Northern Virginia, Frankfurt, and London, utility interconnection queues now stretch up to four years.

This has forced operators to look at secondary markets and retrofits as potential solutions to their problems.

Construction costs and lead times remain high
Cost challenges

Bernstein's report also highlights that construction costs have risen by 20-25% since 2023, owing to electrical equipment, steel, and specialized labor.

The firm also notes that lead times for high-voltage transformers and switchgear are still at 80-100 weeks.

This long wait time further delays the restart of stalled projects in the data center construction industry.

Long-term demand for data centers remains strong
Future prospects

Despite the current challenges, Bernstein's report remains optimistic about the long-term future of data centers.

The firm believes that AI inference and training will continue to drive demand for these facilities.

It also predicts that "the backlog should clear post-2027 as new power comes online and cooling designs standardize."

Hyperscalers are likely to prioritize their own large campuses while colocation providers focus on densification and edge sites requiring less power per megawatt (MW).