Industry analysts report that surging North American AI demand is actively testing existing data center construction capacity and supply chain bottlenecks.
Data center development is accelerating across North America, with surging demand increasingly colliding with limited power, infrastructure, and available capacity. Recent reports from CoStar and CBRE highlight record construction activity alongside tight market conditions, underscoring the operational challenges of bringing new capacity online. This surge is expanding beyond data center facilities themselves, driving growth among construction firms, power and cooling equipment suppliers, operators, and IT infrastructure providers. Together, these findings emphasize a critical site selection imperative: markets that can deliver reliable power, robust infrastructure, and development certainty will be best positioned to capture continued investment.
According to CoStar’s latest report, national data center inventory has reached approximately 69 gigawatts of existing capacity, with another 43 gigawatts currently under construction. This development boom is significantly impacting industrial demand. In 2026, data center-adjacent occupiers accounted for more than 6% of leasing activity across logistics properties located within five miles of data center facilities, up from less than 3% in 2020. Growth has been broad-based across multiple sectors, including construction, power and cooling equipment suppliers, operators, and IT infrastructure providers.
“The data center industry remains one of the fastest-growing segments of commercial real estate,” said Juan Arias, National Director of industrial analytics at CoStar Group. “Vacancy remains near historic lows as demand from hyperscale cloud providers and AI-related users continues to outpace new supply. Hyperscale facilities now account for 64% of existing capacity, underscoring the scale at which major technology companies are expanding their infrastructure footprints.” Among major markets, Dallas-Fort Worth leads the nation with approximately 10 million square feet of occupied logistics space leased by data center-adjacent industries since 2025. Houston, Atlanta, and Phoenix rank behind Dallas, respectively.
“Many of these markets coincide with established or emerging data center hubs where abundant land, infrastructure investments, and relatively favorable power economics have attracted large-scale development,” Arias added. “Operators are increasingly prioritizing locations with access to new electrical generation, substations, and transmission infrastructure as they seek to bring capacity online. As a result, demand is extending beyond data center buildings themselves and into the broader supply chain required to construct and operate them.”
CBRE’s latest North American Data Center Trends Report confirms that demand has left the North American data center market with limited available capacity despite record construction activity. After power-related project delays briefly softened activity at the end of 2025, new construction rose 24.8% across eight primary North American data center markets in the first half of 2026. The 7,481 megawatts (MW) under construction in H1 2026 surpassed the previous peak reached in 2024. Although power constraints are extending completion timelines, more projects are advancing from planning into construction. More than 80% of all capacity under construction is already preleased, up from 74.3% a year ago, leaving less than 1,500 MW available for pre-leasing across North America’s primary markets. At the current pace of demand, that equates to roughly six months of supply.
Total data center supply across North America’s primary markets grew 33.7% year-over-year to a record 10.9 megawatts (MW). Meanwhile, net absorption—the amount of space newly occupied minus the amount newly vacated—increased by nearly 12% to 1,456 MW. Vacancy held steady at 1.4%, consistent with year-end 2025 levels. “Developers are bringing more projects to market, but occupiers are absorbing new capacity almost as quickly as it can be delivered,” said Pat Lynch, Executive Managing Director, CBRE Data Center Solutions. “The challenge is no longer whether developers want to build. It’s whether power, infrastructure and approvals can keep pace with the scale of demand. Markets that can alleviate those bottlenecks will be best positioned to capture the next wave of investment.”
Locally, Atlanta emerged as North America’s most active construction market for the first time, with nearly 2,900 MW under construction, overtaking Northern Virginia. Northern Virginia, however, remained the country’s largest market by inventory and recorded the highest level of net absorption at 467.7 MW, driving its vacancy rate down to 0.2%.