Builders Risk in the Age of AI: Managing Data Centre Construction at Unprecedented Scale

The rapid expansion of artificial intelligence is fuelling an unprecedented boom in data centre construction. Hyperscale facilities are growing in size, complexity, and value. This development brings new engineering, construction, and insurance challenges that require a fundamentally different approach to risk management.

Our latest Risk Engineering Services publication, Data Centre Builders Risk (Engineering & Construction), explores how evolving design standards, high-density computing, and AI-driven workloads are transforming risk profiles across the entire project lifecycle.

From power infrastructure constraints and aggressive construction timelines to emerging cooling technologies and natural catastrophe exposures, the paper outlines how stakeholders can better anticipate risks and build resilience into next-generation data centre projects.

Key risks shaping data centre construction and builders risk

1. Unprecedented scale and capacity constraints
Modern hyperscale data centres routinely reach multi-billion-dollar valuations, with some projects exceeding USD 25 billion. However, available insurance capacity often lags behind project scale, creating challenges in structuring effective risk transfer solutions.

2. Power demand and infrastructure limitations
AI-driven workloads are dramatically increasing electricity demand, forcing a shift toward on-site and hybrid power generation. Grid constraints, turbine shortages, and energy volatility are now critical considerations in both site selection and risk assessment.

3. Cooling, water usage, and liquid-based systems
The transition to liquid cooling introduces significant water usage and leak risks. Even minor system failures can escalate into major losses, making robust water damage prevention and monitoring essential.

4. Construction complexity and accelerated timelines
Fast-tracked builds, modular construction methods, and evolving design requirements increase exposure to fire, equipment damage, and delays in start-up. Early collaboration between stakeholders is critical to mitigate these risks.

5. Natural catastrophe and location-specific risks
Data centres are often concentrated in key regions, increasing exposure to hazards such as floods, earthquakes, and extreme weather while also creating accumulation risks for insurers.

Explore the key engineering, construction, and risk challenges shaping hyperscale data centres — from power and cooling constraints to fire, water, and natural catastrophe exposures — and discover practical strategies to enhance resilience.