The Data Center Boom: Five Trends Engineering Firms Need to Know

The data center market is experiencing unprecedented growth, driven by artificial intelligence adoption and changing infrastructure demands. For ACEC member firms, this represents both a substantial business opportunity and a chance to shape critical national infrastructure. ACEC's latest Market Intelligence Brief reveals a market poised to reach $62 billion in design and construction spending by 2029, with implications that extend far beyond traditional data center engineering.

The launch of ChatGPT in 2022 marked an inflection point. What began as voice assistants has evolved into sophisticated language learning models that consume dramatically more energy. A standard AI query uses about 0.012 kilowatt-hours, while generating a single high-quality image requires 2.0 kWh—roughly 20 times the daily consumption of a standard LED lightbulb. As weekly ChatGPT users surged from 100 million to 700 million between November 2023 and August 2025, the infrastructure implications became impossible to ignore.

AI-driven data center power demand, which stood at just 4 gigawatts in 2024, is projected to reach 123 gigawatts by 2035. Even more striking: 70 percent of data center power demand will be driven by AI workloads. This explosive growth requires engineering solutions at unprecedented scale, from power distribution and backup systems to advanced cooling technologies and grid integration strategies.

Public perception about data center water consumption often overlooks important nuances in cooling technology. While mechanical cooling systems have historically consumed significant water resources, newer approaches could dramatically reduce water use. Free air cooling, closed-loop systems, and liquid immersion technologies offer low-water use alternatives, with some methods reducing freshwater consumption by 70 percent or more compared to traditional systems.

As Thom Jackson, mechanical engineer and partner at Dunham Engineering, notes: "Most data centers utilize closed loop cooling systems requiring no makeup water and minimal maintenance." The "big four" hyperscale operators—Amazon Web Services, Microsoft Azure, Google Cloud Platform, and Meta—have all committed to becoming water-positive by 2030, replenishing more water than they consume. These commitments are driving innovation in cooling system design and creating opportunities for engineering firms with expertise in sustainable mechanical systems.

The days of one-size-fits-all data centers are over. Latency requirements, scalability needs, and proximity to end users are accelerating adoption of diverse building types. Edge data centers bring computing closer to users for real-time applications like IoT and 5G. Hyperscale facilities support massive cloud and AI workloads with 100,000-plus servers. Colocation models enable scalable shared environments for enterprises, while modular designs—prefabricated with integrated power and cooling—offer rapid, cost-effective deployment.

Each model presents distinct engineering challenges and opportunities, from specialized HVAC systems and high floor-to-ceiling ratios for hyperscale facilities to distributed infrastructure planning for edge networks.

Two emerging trends deserve particular attention. First, the Department of Energy has selected four federal sites to host AI data centers paired with clean energy generation, including small modular reactors (SMRs). The Nuclear Regulatory Commission anticipates at least 25 SMR license applications by 2029, signaling strong demand for nuclear co-location expertise.

Second, developers are increasingly exploring adaptive reuse of underutilized office spaces, Brownfield sites, and historical buildings. These locations offer existing utility infrastructure that can reduce construction time and costs, making them attractive alternatives despite some design constraints.

Recent federal policy changes are streamlining data center deployment. Executive Order 14318 directs agencies to accelerate environmental reviews and permitting, while revisions to New Source Review under the Clean Air Act could allow construction to begin before air permits are issued. ACEC recently formed the Data Center Task Force to advocate for policies that balance speed, affordability, and national security in data center development, complimenting EO 14318.

For engineering firms, site selection expertise has become increasingly valuable. Success hinges on sales and use tax exemptions, existing power and fiber connectivity, effective community engagement, and thorough environmental risk assessment. AI-driven planning tools like UrbanFootprint and ESRI ArcGIS are helping developers evaluate site suitability, identifying opportunities for firms.

The data center market offers engineering firms a chance to lead in sustainable design, infrastructure innovation, and strategic planning at a moment when digital infrastructure has become as critical as traditional utilities.