Demand for data centers in the United States continues to grow and appears to be far from its saturation point despite emerging constraints on supply, McGuireWoods partner Greg Riegle told Law360 in a Jan. 8, 2025, story.
Law360 reported that power constraints are a major hurdle to new projects, and some elected officials have cooled on plans to build more data centers in their communities, but the industry has seen few, if any, signs of slowdown in response.
“This is a form of real estate development, and almost always you reach a point where the market’s overcooked or oversupplied, but I get no indication that we are anywhere near that point,” said Riegle, an adviser to data center companies.
Riegle said some localities must make tough choices between approving data centers, which typically generate a lot of tax revenue, or other worthy projects. Three Northern Virginia counties tightened rules for data centers in 2024, reflecting a trend toward more restrictions. “Those choices get harder when you’re talking about making a choice between a data center and a transit or mixed-use development,” Riegle said. “That being said, there are still a number of localities that are working hard to attract and incentivize the industry.”