Construction of new data centers in the U.S. fell for the first time since 2020 despite soaring demand for artificial-intelligence computing capacity, as developers face delays in permitting, zoning and power procurement.
Capacity under construction fell to 5.99 gigawatts at the end of 2025 from 6.35 gigawatts at the end of 2024, real estate brokerage CBRE Group Inc. reported Wednesday.
The construction delays and faster long-distance networks are driving development to move outside traditional data center sites such as northern Virginia, Gordon Dolven, CBRE’s data center research director, said in the report. The overall vacancy rate in primary markets fell to a record low 1.4% at year-end.
“Combined with growing interest in markets that offer available land and power, this is spurring investment beyond traditional hubs and reshaping the North American data center market,” Dolven said.
Local pushback against massive AI data center projects has intensified in recent months, with the tide turning from welcoming the economic benefits of major construction projects to scrutinizing their resource-intensiveness.
Last week, Illinois Gov. J.B. Pritzker sought to temporarily halt incentives for data centers in a bid to contain soaring power costs. An Oracle Corp. site in New Mexico that scored a package of tax incentives and support from government-backed bonds has prompted protests largely focused on its potential environmental impact. And tensions have flared in northern Virginia, where some residents are now looking to flee what’s become one of the largest data center hubs in the world.
AI demand is forecast to require more than $3 trillion in data center investment, including related power supplies, according to estimates from Morgan Stanley and Moody’s Ratings. New tenants absorbed a record 2.5 million gigawatts in 2025, up 38% from a year earlier, CBRE said.
Construction underway fell 29% in northern Virginia, followed by a 15% drop in Hillsboro, Ore., and a 14% decline in Silicon Valley, CBRE reported. Projects soared 169% in Chicago and 15% in Dallas-Fort Worth.
Atlanta had more than 2 gigawatts of projects under construction, ahead of 1.9 gigawatts in northern Virginia, in the second half of 2025.
Gittelsohn writes for Bloomberg.