While global sentiment may be subdued in some sectors, there is a lot of excitement about data centers. Demand for data center capacity is expected to grow rapidly in coming years, driven not only by customer demand but also by the rapid rise of artificial intelligence (AI) advancements. To meet this demand, AI data center capacity is conservatively projected to experience a compound annual growth rate (CAGR) of 40.5% through 2027, according to estimates from the International Data Corporation. (opens a new window)
Data centers need to meet and exceed exacting standards from often demanding customers, both during construction and the data center's operational life. Whilst there is much positive pressure on developers to deliver these increasingly large and complex construction projects quickly; quality and reliability are cornerstones of every customer requirement. Owners may face significant financial consequences should they not meet the ‘Ready For Service’ date or the standards they have agreed with their customers. Risk management, which includes engaging with the global insurance market, must therefore be a key consideration. The global insurance market has rightly identified technology and digital infrastructure as an area of focus for both capacity and IP deployment. Engaging with insurers effectively will create opportunities to secure good terms for transferring risk from investors' and owners' balance sheets to insurers. Data centres face complex risks at every stage of their lifecycle - from initial planning and construction to operational phases and eventual sale. Understanding these exposures early is critical to safeguarding project value and resilience. This perspective examines key risk considerations throughout the journey and offers practical strategies for mitigating vulnerabilities, ensuring continuity, and supporting long-term performance.