AI Data Center Boom Creates Resource Crunch for Traditional Infrastructure Projects

Data Center Construction Surge Threatens Infrastructure Project Timelines Across America

The explosive growth of artificial intelligence and data center construction is creating a significant resource crunch for traditional infrastructure projects like road, bridge, and water system improvements, according to recent analysis and industry experts. The competition for construction workers, materials, and capital is intensifying as private investment in data centers reaches unprecedented levels while skilled labor availability continues to decline.

"Absolutely, there is no doubt" that data center construction is consuming resources from other projects, according to Andrew Anagnost, CEO of architecture and design software maker Autodesk. "I guarantee you a lot of those [infrastructure] projects are not going to move as fast as people want," he warned in recent comments to Bloomberg.

The Numbers: Unprecedented Private Investment in Data Centers

The scale of the data center boom is staggering. According to U.S. Census Bureau data, private spending on data center construction is running at an annualized rate of more than $41 billion—roughly equivalent to the total state and local government spending on transportation construction. This creates a direct competition for construction resources, workers, and materials between private data center projects and publicly-funded infrastructure improvements.

Meanwhile, state and local governments have increased borrowing to fund infrastructure projects. In 2025, state and local governments sold a record amount of debt for the second consecutive year, with strategists predicting another $600 billion in debt sales planned for 2026 to fund infrastructure projects. This suggests increased public investment in roads, bridges, water systems, and other critical infrastructure—but at a time when construction capacity is being pulled toward lucrative data center projects.

Labor Shortage Intensifies the Competition

The competition for construction resources occurs against a backdrop of persistent labor shortages across the industry. The construction sector faces multiple headwinds in workforce availability:

Workforce Challenges

• Retirements: Experienced workers are leaving the field faster than young people are entering the trades
• Immigration Restrictions: Recent policy changes have tightened immigration, reducing the pool of available construction workers
• Skills Training Gap: Insufficient workforce development programs to train the next generation of skilled construction workers
• Wage Competition: Major data center projects may offer higher wages or more visible career opportunities than traditional infrastructure work

Impact on Project Delivery

The convergence of high private data center spending and public infrastructure investment happens precisely when the construction industry can least afford to stretch its workforce. This creates several challenges for infrastructure project delivery:

• Delayed project schedules as contractors struggle to find available crews
• Higher labor costs as contractors compete for scarce skilled workers
• Increased difficulty in securing long-lead materials, as data center projects consume materials from global supply chains
• Construction bottlenecks in regions with major data center development activity

Supply Chain and Material Pressures

Beyond labor, data center construction competition extends to critical materials and supply chains. Data center projects typically require:

• Advanced electrical equipment and switchgear
• Large quantities of specialty mechanical and HVAC systems
• High-capacity power distribution equipment
• Specialized cooling and environmental control systems
• Advanced network infrastructure and telecommunications cabling

These materials and components often have extended lead times, and when data center developers place large orders, traditional infrastructure projects may face delays in obtaining necessary materials. This can extend project schedules and increase costs as projects wait for materials or pay premium prices for expedited delivery.

What This Means for Infrastructure Project Delivery

The data center boom creates several implications for the broader construction industry and public infrastructure initiatives:

Slower Infrastructure Progress

Public infrastructure projects funded through state and local government bonds may not progress as quickly as originally planned. Road expansions, bridge replacements, water system upgrades, and other critical infrastructure work may experience delays as construction companies prioritize lucrative data center projects. This could slow economic development, increase commute times, and delay critical water and utility infrastructure improvements.

Higher Costs for Public Projects

As data center projects bid up the cost of labor and materials, state and local government infrastructure budgets must stretch further to accomplish the same work. This means fewer projects can be completed with available funds, or projects must be scaled back in scope. Communities may face tough choices between infrastructure priorities when construction costs are inflated by data center competition.

Regional Economic Disparity

Regions with major data center development activity may see accelerated development in technology infrastructure while traditional infrastructure improvement projects suffer delays. This could create economic disparities between regions hosting major data center investments and areas relying primarily on traditional infrastructure funding.

Strategic Implications for Contractors and Project Owners

For Construction Companies

Contractors face important strategic decisions about resource allocation. Companies that specialize in data center construction may enjoy higher margins and more consistent work, while those focused on traditional infrastructure must consider diversification or specialization strategies. Investment in workforce development, prefabrication, and technology-driven efficiency becomes increasingly important for traditional infrastructure contractors to remain competitive.

For Project Owners

State and local government agencies managing infrastructure projects should consider:

• Project Timing: Accelerating critical projects before construction resources become even more scarce
• Design Innovation: Incorporating prefabrication and modular construction to reduce on-site labor requirements
• Workforce Partnerships: Working with regional workforce development agencies to expand the available labor pool
• Cost Contingencies: Building substantial contingency budgets for labor and material cost increases
• Project Bundling: Combining multiple smaller projects to attract larger contractors with efficient operations

Industry Outlook and Future Trends

The data center construction trend is unlikely to slow in the near term. As artificial intelligence continues to drive technology investment and major tech companies expand data center capacity, construction demand will remain strong. Meanwhile, critical infrastructure in many American regions remains aging and underfunded, creating a long-term backlog of necessary improvements.

This creates a sustained period of infrastructure challenge, where public needs compete with private investment for limited construction resources. Success in this environment will require innovation in construction methods, significant investment in workforce development, and strategic project prioritization by both public and private sectors.

Key Takeaways

• Data Center Spending: Private data center construction investment reaches $41B+ annually—equal to all state and local transportation spending
• Public Infrastructure Investment: State and local governments plan $600B+ in debt-funded infrastructure projects for 2026
• Labor Competition: Both sectors compete for skilled construction workers amid persistent shortages from retirements and immigration restrictions
• Supply Chain Pressure: Data center projects consume specialty materials and long-lead items, delaying traditional infrastructure work
• Project Delays Expected: Autodesk CEO warns infrastructure projects "not going to move as fast as people want"
• Strategic Necessity: Innovation, prefabrication, and workforce development critical for infrastructure project success
• Regional Impacts: Areas with major data center development may see uneven infrastructure development compared to other regions

Source: TechCrunch, "AI data center boom could be bad news for other infrastructure projects," December 13, 2025; Bloomberg, "AI Data Center Boom May Suck Resources Away from Road, Bridge Work"; U.S. Census Bureau; Autodesk commentary and analysis. IndexBox, "Data Center Boom Strains Infrastructure Funding and Labor in 2025."