Singapore – Global investment in data centres is accelerating, with total spending projected to approach US$7t by 2030, according to Allianz Commercial’s latest report. The expansion is being powered by growing demand for AI and cloud computing, with the United States and China leading construction activity.
The report notes that hyperscale developers—mainly major technology firms such as Amazon, Microsoft, Google Cloud, Alibaba, Tencent, and Baidu—are driving large-scale infrastructure development to meet rising digital and AI workloads. Collectively, these companies accounted for more than 60% of global cloud revenue in 2025, with capital expenditure exceeding US$200b in 2024.
Construction spending in the United States reached US$74b in 2024, while China’s installed IT capacity in the Greater Beijing area is expected to double to by 2030.
The Asia Pacific region, which represents roughly 30% of global capacity, is forecast to expand at a compound annual growth rate of 21% from 2024 to 2028. China, Japan, and India remain the largest contributors, while India, Malaysia, and Indonesia are projected to lead the next phase of growth.
“As the demand for data centres in the region surges, it is crucial that parties fully understand the risks involved during construction and operation,” Christian Sandric, managing director of Allianz Commercial Asia, stated.
“Beyond the main risks, parties also need to consider other risks such as cyberattacks, and impact on the surrounding environment, ecosystem and infrastructure. For example, cooling systems may discharge heated water back into local water bodies, raising temperatures and affecting aquatic ecosystems.”
Allianz Commercial highlights that the boom in construction has also introduced new challenges and risks. The cost of building data centres has escalated sharply, from about US$200m to more than US$20b for major projects. Power demand is another key concern, with global electricity consumption from data centres expected to exceed 945 terawatt hours by 2030—surpassing that of Japan’s current usage.
Fire, heat, and water stress also pose rising risks. Lithium-ion battery use in data halls has increased, while high cooling demands mean large facilities can consume up to 19 million litres of water daily. More than half of the world’s leading data centre hubs are now considered vulnerable to climate-related risks, particularly in regions such as South Asia, the Middle East, and parts of the United States.
“Construction projects as complex and extensive as data centres require significant time and resources,” Darren Tasker, head of construction in the Americas at Allianz Commercial, shared.
“Typically, they require project-specific policies given their size and their unique risk profile that demands specialised insurance.”
The report warns that while AI-driven demand shows no signs of slowing, potential headwinds such as rising construction costs, labour shortages, power constraints, and regulatory pressures could temper future expansion.
Nevertheless, the report forecasts that continued investment in AI and cloud computing infrastructure will keep the data centre sector on a strong upward trajectory, especially across fast-growing Asia Pacific markets.
