Three ways construction firms can build on strengths and grow
Executive summary
Data center demand is exploding as companies pour money into AI and cloud computing, but there’s a catch — mega-projects keep running over budget and behind schedule. A growing opportunity within this digital backbone of the future economy is in smaller, urban data centers, favoring builders who can move fast and keep projects on track with the right strategy.
The data center boom is real, and everyone wants in. Tech giants like Microsoft, Google, Amazon and Meta are expected to spend over $300 billion this year alone on data centers, with global capital expenditure projected to surpass $1 trillion annually by 2029.
This massive demand has construction firms of all sizes chasing work from hyperscalers, but what some are missing is the parallel growth opportunity in smaller, urban facilities. Some investors are shifting toward large portfolios of well-connected sites that spread risk across an economy undergoing significant digital change and generate favorable risk-adjusted returns.
“With a race toward AI dominance, cost overruns and return on capital have been less in focus for data center construction, with the assumption that demand will continue to dwarf supply. As this digital backbone of a new AI-infused economy grows, agile firms that take a more strategic location-driven lens have a real opportunity to differentiate themselves by delivering on time and on budget.”
These market shifts favor firms that can move quickly in urban markets and manage multiple projects efficiently. But there’s a fundamental execution problem holding most contractors back — the industry’s “build it and they will come” mentality has led to widespread cost overruns and delays. One of the reasons: Most contractors are still running projects with disconnected systems and manual processes. Grant Thornton’s Digital Transformation Survey found that poor system integration is the top challenge construction firms face with technology adoption.
“With a race toward AI dominance, cost overruns and return on capital have been less in focus for data center construction, with the assumption that demand will continue to dwarf supply,” said Ronan Curran, Grant Thornton Transaction Advisory Services Principal. “As this digital backbone of a new AI-infused economy grows, agile firms that take a more strategic location-driven lens have a real opportunity to differentiate themselves by delivering on time and on budget.”
The demand is growing for firms that can deliver these urban facilities on budget and on time. Organizations that modernize their technology approach can separate themselves from the competition and create the foundation for reliable, profitable delivery with these three strategies.
Data-driven strategic decision
Success starts with upfront planning. The firms winning these projects don’t just move fast — they move with precision, using integrated data and market intelligence to shape every major decision from site selection — including whether to repurpose existing sites — to energy planning and the construction phasing strategy.
Successful developers start with economic feasibility analysis that goes beyond basic pro formas. They start by seeing where customer demand will emerge, where target businesses are located and reside. Equipped with data on customer bases and market trends, this involves assessing the target market opportunity and projected growth.
Data-driven economic feasibility then extends to considering the fundamentals of the data center:
- How much will land acquisition and capital development cost?
- What are its key revenue streams?
- What is the estimated OpEx cost?
“Such features ultimately contribute to strategic go/no-go decisions, supported by metrics relating the financial viability of the data center — and subjected to rigorous sensitivity and risk analyses,” said Lorcan Blake, Grant Thornton Ireland Director of Advisory Consulting.
This enables developers to deliver their services, then model realistic absorption timelines. This strategic positioning determines which sites get financing and which projects actually lease up.
Power planning and site connectivity are equally critical factors that require upfront analysis. Successful firms confirm utility capacity and delivery dates in writing before committing capital, then design flexible build phases around actual power availability rather than hoped-for schedules. Similarly, proximity to current and future major fiber routes, carrier hotels and cloud on-ramps directly impacts leasing velocity because tenants can integrate faster with existing infrastructure.
“Contractors and developers need integrated systems that tie market analysis, energy planning and construction strategy into one coherent plan that all stakeholders can track,” Blake said. “When your business case, financing and build schedule align around the same data sources, projects stay on budget and timelines hold. This requires moving beyond disconnected spreadsheets to platforms that keep owners, lenders and construction teams working from shared assumptions.”
This structured approach helps agile firms compete with larger players and earn repeat business. When decision-making is data-driven and repeatable, scaling creates competitive advantage rather than operational chaos.
Automate to streamline operations
Data-driven planning only works if your internal operations can execute efficiently at scale. The firms winning repeat business use automation to avoid operational bottlenecks that kill profitability.
- Design coordination delays. Data center projects involve intricate MEP systems and integration points that evolve throughout construction. Rather than chasing design clarifications after problems emerge, contractors should engage early in the design phase to evaluate constructability, material lead times and potential cost-saving alternatives up front. Some firms are piloting AI-powered clash detection tools that can identify potential conflicts in 3D models and suggest optimal MEP routing before construction begins. This proactive approach prevents downstream rework, reduces change orders and protects project schedules from the start.
- Change management inefficiency. In data center builds, scope changes are inevitable as technology requirements shift during construction. Rather than reactive approval processes, leading firms use proactive change impact analysis — systematically assessing how design changes affect cost, schedule and critical infrastructure components before implementation. Some firms are beginning to use AI algorithms that can instantly model the ripple effects of design changes across multiple building systems, providing real-time cost and schedule impact analysis. This allows for informed decisions that balance performance goals with budget and timeline constraints.
- Portfolio resource allocation. As firms take on multiple data center projects simultaneously, resource allocation becomes critical. Without integrated systems to track project manager bandwidth, equipment procurement timelines and trade partner availability across the portfolio, firms either overcommit and deliver late or underutilize capacity and miss growth opportunities. Successful firms implement unified platforms that provide real-time visibility into resource allocation across their entire portfolio. Emerging AI tools can predict resource conflicts and automatically suggest reallocation strategies based on historical project patterns, enabling better capacity planning and more predictable project delivery.
When these operational systems work together, they create scalable capacity. Automated workflows reduce the administrative cost per project while improving predictability for clients. That combination of efficiency and reliability separates firms that can handle portfolio growth from those that lose control as they expand.
Real-time project visibility
Efficient back-end operations enable the client-facing transparency that wins premium work. Clients increasingly expect partners who can demonstrate exactly where their capital is going and when milestones will hit — not just at monthly meetings, but continuously.
“Contractors add the most value when engaged early in the design phase, helping owners evaluate constructability, material lead times and potential cost-saving alternatives,” said Alex Koltsov, Grant Thornton Risk Advisory Services Principal and Construction Advisory Practice Leader. This early collaboration prevents costly rework and builds owner confidence in project delivery.
Beyond early collaboration, contractors can foster trust through cost transparency and decision alignment. By maintaining clear, real-time cost tracking tied to specific design and construction decisions, they help owners understand exactly how field-level changes — such as material substitutions or sequencing adjustments — affect the overall budget.
“Integrated financial and operational systems are critical to effectively manage changes that come up,” Koltsov said. “By communicating how field-level changes affect the overall budget, they help owners make trade-offs with full financial visibility.” This speed of response keeps projects moving while building owner confidence.
This transparency delivers predictable project outcomes and enables portfolio scaling. That predictability differentiates you in a market where most contractors are still managing projects through disconnected spreadsheets.
An AI-forward future: What it means for you
With these three strategies — data-driven planning, streamlined operations, and real-time visibility — firms can better prepare for the market shift toward urban edge facilities while positioning themselves as lower-risk partners for the institutional capital needed for portfolio growth. These strategies also help them adapt to inevitable changes that will emerge as AI’s applications and data center requirements continue to evolve.
“While we know that AI demand and adoption is expected to grow significantly over the next decade, how it gets deployed across businesses and impacts consumers’ day-to-day life is still subject to significant uncertainty,” Curran said. “Hyperscalers and large capital providers will continue to invest heavily in larger campus-style projects with large developers, but smaller developers and operators can still do well in this construction boom by applying a more flexible and strategic lens.”
That lens includes focusing on:
- End-user demand for AI and geographical infrastructure needs
- Design flexibility to maximize space and power usage
- Future-proofing for changes in power absorption and AI deployment
- Realistic expectations about technology leaps — from chip efficiency to quantum computing
- Proactive stakeholder engagement with investors, regulators and community partners
Firms that master both strategic flexibility and operational excellence will be best positioned to capture the growing opportunities in data infrastructure.
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This Grant Thornton Advisors LLC content provides information and comments on current issues and developments. It is not a comprehensive analysis of the subject matter covered. It is not, and should not be construed as, accounting, legal, tax, or professional advice provided by Grant Thornton Advisors LLC. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this content.
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