New Delhi [India], July 12 (ANI): The global data centre buildout is set to hit a speed bump as capacity gets pushed out and cancellations rise, with the tightest supply conditions expected to ease only after 2026, according to research report by Bernstein’s.
Bernstein expects “the pace of cancellations to accelerate into 2027” as developers reassess projects amid power, cooling and supply-chain constraints. The firm also sees “a wave of project delays in 2025-2026” that will keep available capacity tight in the near term, even as demand for AI workloads continues to grow.
The report tracks the pipeline across hyperscalers, colocation providers and enterprise builds. While announced capacity remains high, conversion to operational power is slowing.
“We estimate 35-40% of announced capacity globally is at risk of delay or cancellation,” Bernstein notes, citing bottlenecks in grid connections, transformers, and liquid-cooling infrastructure needed for AI servers.
That squeeze is most acute in core US and European markets. The analysis finds that “power availability, not capital, is now the primary gating factor” for new sites. In Northern Virginia, Frankfurt and London, utility interconnection queues now stretch 3-4 years, forcing operators to look at secondary markets and retrofits.
Construction costs are also a headwind. Bernstein estimates costs per MW have risen “~20-25% since 2023”, driven by electrical equipment, steel and specialised labour. The report adds that “lead times for HV transformers and switchgear remain at 80-100 weeks,” limiting how fast delayed projects can restart.
Despite the delays, the long-term outlook stays constructive. The firm argues AI inference and training will keep driving demand, and “the backlog should clear post-2027 as new power comes online and cooling designs standardise.” It expects hyperscalers to prioritise their own 1GW+ campuses, while colos focus on densification and edge sites that require less power per MW.
For investors, Bernstein sees a bifurcation: companies with secured power and land will gain share, while those dependent on future utility allocations face write-downs. Equipment suppliers with exposure to liquid cooling and power distribution are flagged as relative beneficiaries.
“We remain constructive on data center demand, but the path is lumpier,” the report concluded, with 2025-2026 marked by slippage before a reacceleration later in the decade. (ANI)
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