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Data center construction capacity to decline in 2025 amid compounding supply chain bottlenecks
Wednesday, February 25, 2026 at 08:32 PM
Data center capacity under construction is projected to decrease from 6.35 gigawatts at the end of 2024 to 5.99 gigawatts by the end of 2025, according to CBRE. Supply chain bottlenecks involving permits, labor, specialized equipment, and memory components are hindering the scaling of infrastructure beyond current growth trends.
Context
CBRE reported that North American data center capacity under construction fell to 5.99 gigawatts by the end of 2025, down from 6.35 gigawatts at the close of 2024. This decline signals that project deliveries are currently outpacing new groundbreakings as the industry hits a physical supply ceiling. Compounding bottlenecks in power grid availability, skilled labor, and critical equipment like transformers and generators are extending timelines beyond three years, while shortages in high-bandwidth memory further complicate the AI hardware rollout.
Despite the construction dip, demand remains at historic highs, with vacancy rates across primary markets plummeting to a record-low 1.6%. This supply-demand imbalance has triggered aggressive preleasing and sharp pricing spikes, with lease rates for large-scale deployments rising by as much as 19% year-over-year. While massive capital is committed to the sector through initiatives like the $500 billion Project Stargate, the binding constraint for investors has shifted from funding to the physical speed of infrastructure delivery and power interconnection.
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