AI Demand Is Leading to Major Data Center Expansions - but Do They Have the Power to Fully Operate?

Why It Matters

The power shortfall and soaring build costs threaten the profitability and sustainability of the AI‑fuelled data‑center boom, potentially slowing AI spending growth and prompting a shift to alternative locations.

Summary

AI-driven demand is spurring rapid data‑center expansion across EMEA, with live capacity up 12% and occupancy reaching 91% in Q3 2025. Yet power delivery lagged, totaling only 850 MW in 2025 – 11% below the previous year – and Gartner warns two‑fifths of facilities could face power constraints by 2027 as AI‑optimized servers may need 500 TWh, a 2.5‑fold rise from 2023. Construction costs have also surged to $7.3‑13.3 million per megawatt amid labor, land and supply‑chain shortages, prompting developers to look to non‑traditional sites such as Portugal and Saudi Arabia.