U.S. Data Center Growth Slows as Power Grid Lags

Challenges in electrical infrastructure hinder data center expansion

Data center construction in the U.S. has slowed by 17% in the first half of 2025 compared to the previous year, primarily due to power supply constraints. Investments have fallen below $1 billion, with major companies like Microsoft and AWS pausing or slowing their expansion plans. Despite these challenges, demand remains strong, especially in regions like Oregon and the Twin Cities, which offer skilled labor and reliable energy availability.

• Construction Slowdown: Data center construction has decreased by 17% in the first half of 2025.

• Investment Decline: Investments in data center projects have fallen below $1 billion.

• Regional Demand: Areas like Oregon and the Twin Cities continue to see strong demand due to skilled labor and energy availability.

“The infrastructure has now been outpaced by the construction of facilities,” said Kristin Hammond, a CBRE senior vice president and broker based in Portland, Oregon.

CONCLUSION

This slowdown highlights the urgent need for enhanced grid infrastructure to support the growing data center demands. HVDC solutions can play a pivotal role in addressing these challenges by providing efficient and scalable transmission options.

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U.S. data center growth slows as power grid lags