Risks, Conflicts, and Constraints Shaping Data Center Development

The AI boom is transforming data center demand and creating new legal, regulatory, and energy challenges

The first data center was built in 1945 to house the Electronic Numerical Integrator and Computer (ENIAC), which the US military designed to calculate artillery firing tables. The machine weighed more than twenty-seven tons. Data storage came in the form of punch cards and could only perform numeric calculations.

Plenty has changed. In the 1950s, transistorized computers allowed data centers to move into large office buildings, universities, and government institutions. The microprocessor revolution of the 1980s and 1990s ushered in the era of on-site information technology (IT) server rooms. By the early 2000s, widespread internet adoption and the advent of cloud computing began shifting infrastructure away from in-house servers toward hyperscale facilities that could provide computing power and storage on demand.

For decades, data centers generally tracked Moore’s Law: advances in chip performance and power efficiency meant the physical footprint of computing infrastructure expanded more slowly than demand.

Then came the artificial intelligence (AI) boom.

AI’s bottomless appetite for compute power is forcing a fundamental shift. Demand now increasingly requires more chips, more energy, and, yes, more data centers. A 2026 report, for instance, projects that global data center capacity will double by 2030, requiring as much as $3 trillion in investment.

This unprecedented—and rapidly accelerating—surge in demand, infrastructure needs, and energy resources creates challenges across the data center ecosystem for stakeholders including developers, operators, corporate offtakers, attorneys, investors, and policymakers.

BRG’s new data center–themed double issue of ThinkSet magazine focuses on understanding and navigating those challenges.

The insights in this issue reflect the myriad ways in which data centers impact nearly every business around the world—and how BRG’s global team of experts can support players across key industries throughout the data center development lifecycle.

Take the energy sector, where AI-driven data centers have upended decades of relatively flat load growth. Christopher Goncalves and Dr. Hans Leonard explore two pivotal frameworks that US policymakers are exploring to assess who pays for power—and who bears the risks. Meanwhile, Peter Smith offers a pragmatic roadmap for policymakers and operators investigating another approach to taming demand: the use of “AI to fix AI” by delivering efficiency gains in areas like cooling optimization, interference, and carbon-aware scheduling.

Our experts also help organizations and their counsel navigate the growing volume of legal risks and disputes stemming from data center builds. Ian Mackie evaluates the valuation complexities associated with hyperscale data centers that look more like owner-occupied infrastructure assets than traditional real estate plays. Gina Waterfield provides guidance around managing local environmental impacts and resulting litigation in the NIMBY era. Malcolm Landman, Declan Redmond, Jas Cheema, and Sean Fishlock go intergalactic, revealing how the development of data centers in outer space could be the next frontier for construction disputes.

Keep an eye out in April for the release of the second part of this issue, which will include articles on the role of labor shortages in data center construction, how construction teams can use AI to meet the demands of hyperscale developments, and data center–related insurance issues.

From punch cards and room-sized machines to campus-style facilities powering large language models, the evolution of data centers has long mirrored that of computing itself. As the next wave of growth crests, organizations will need not only infrastructure but insight. This new issue of ThinkSet exemplifies how BRG’s experts can help leaders understand risks, navigate complexity, and prepare for what will come next.

—Heather Bates, BRG Managing Director