Data centers are rapidly emerging as a major driver of construction activity and, by extension, surety demand. The scale of this shift is already material. The U.S. data center industry contributed close to $927 billion to GDP in 2024[1], underscoring its economic footprint. At the same time, investment is influencing broader economic activity, boosting U.S. GDP by around 0.5 percentage points in 2025,[2] while construction spending has surged to around $40 billion annually[3], driven by artificial intelligence and cloud infrastructure.
For the surety market, this combination of scale, speed and technical complexity is reshaping both demand for capacity and the underlying risk profile.
In this Quick Read, Glen Shaw, Head of North American Surety at PartnerRe, highlights the key considerations for the market as this segment continues to develop.
According to U.S. Census Bureau data, private-sector spending on data center construction has increased more than twentyfold since 2014, with growth accelerating in recent years as investment in AI and cloud infrastructure has expanded.[4] The International Energy Agency identifies data centers as one of the fastest-growing categories of infrastructure investment in the U.S. economy. These projects now form a growing pipeline of large, time-sensitive construction.[5]
Project sizes vary significantly, ranging from hundreds of millions of dollars for individual facilities to several billion for hyperscale developments and multi-billion-dollar campus builds. While it is relatively uncommon for the head contract itself to be bonded, the scale and complexity of these projects are nonetheless driving larger bond sizes throughout the contractor chain.
For the surety market, this translates into sustained demand for capacity and increased concentration of exposure within a rapidly expanding segment. Data centers are reshaping both the opportunity set and the risk profile.
Data center construction is distinguished by its integration of energy infrastructure. These facilities are highly energy-intensive and already accounting for approximately 4.4% of U.S. electricity consumption, with demand rising further in the coming years.[6] Ensuring reliable power supply has therefore become a central component of project design, often requiring grid upgrades, substations or on-site generation. At a national level, projected data center electricity demand could exceed 100 gigawatts (GW) of additional load over the next decade, equivalent to roughly ten times New York City’s peak power demand.[7]
As a result, execution is inherently multi-disciplinary. Electrical, mechanical and Heating, Ventilation and Air Conditioning (HVAC) systems sit on the critical path, requiring close coordination across specialized contractors and often leading to joint ventures or consortium structures to bring together the required expertise.
This level of integration increases execution risk and, by extension, the risk profile of bonded performance obligations, particularly where multiple critical systems must be delivered simultaneously.
The pool of electrical, mechanical and HVAC contractors with the capability to coordinate and execute these complex projects is relatively limited. As a result, the same specialist firms are often engaged across multiple hyperscale developments, leading to growing aggregate exposure across the surety market. Where these contractors are supported by co-sureties exposure can scale rapidly across both primary sureties and reinsurers, increasing concentration risk at an industry level.
Data center development is predominantly driven by private capital, with private equity, infrastructure investors and large technology companies playing a central role. This creates a different risk dynamic compared to public financing. Payment certainty is more directly linked to the financial strength of project sponsors and the robustness of funding structures throughout the construction phase.
As seen in other privately financed sectors, funding variability, whether linked to market conditions or policy assumptions, can have downstream implications if not carefully managed.
The scale and structure of data center projects are increasing both the volume and concentration of surety exposure. Bond sizes rise with growing contract values, particularly on electrical scopes, while multiple bonds are often tied to a single project or sponsor group, increasing aggregation and capacity management considerations within portfolios.
Importantly, the impact extends beyond the data center itself. The build-out of energy infrastructure further expands the pipeline across generation, transmission and distribution, reinforcing the sector’s influence on overall surety demand.
Finally, for the largest hyperscale developments, aggregation considerations may extend beyond surety portfolios. Data center operators and sponsors often create exposures across multiple lines of business and other parts of insurers’ and reinsurers’ balance sheets, highlighting that these exposures also require holistic enterprise risk management consideration.
Although still an emerging segment from a claims perspective, the underlying risk drivers are becoming clearer. The technical complexity of electrical and mechanical systems creates potential for defects that are difficult to diagnose and remediate. Where failures occur, they can affect the entire facility. Multi-party contractor structures further complicate responsibility, particularly in joint ventures, pointing to potentially more complex and longer-to-resolve claims.
In a surety context, this may translate into more complex performance default scenarios, where completion risk, delay or contractor substitution becomes more difficult to assess and resolve, particularly given the limited availability of replacement contractors with the required technical ability and capacity.
It is both. Data centers represent a significant growth opportunity, with sustained demand for bonding capacity and increasing project scale supporting premium volumes, potentially intensifying competition and pricing pressure across parts of the market.
At the same time, the sector remains relatively untested from a claims perspective, is technically complex, and involves large, concentrated exposures. Its reliance on evolving private financing structures introduces additional dependencies.
As with renewables before it, the long-term outcome will depend less on access to opportunity and more on how consistently underwriting discipline is applied as the market continues to scale.
As activity accelerates, underwriting fundamentals remain unchanged, but their application becomes more critical. Four areas stand out:
PartnerRe works with insurers to support the growth of the surety market by providing capacity and expertise for complex, large-scale construction risks, including emerging areas such as data centers.
Drawing on our experience in contract surety and infrastructure-related risks, we help our clients navigate evolving exposures, manage aggregation, and maintain underwriting discipline in a rapidly changing environment. We invite you to reach out to us to discuss how we can support your surety portfolio.
Glen Shaw, Head of North American Surety, Financial Risks, PartnerRe
[1] “Economic Contributions of Data Centers in the United States, 2023-2024”, PWC May 2026. https://www.datacentercoalition.org/reports-and-publications
[2] Data center investments are increasingly moving the macro needle | S&P Global
[3] US data center build hits record as AI demand surges, Bank of America Institute says – The Economic Times
[4] Visualized: U.S. Data Center Investment (2014–2025)
[5] Investment in data centres in the United States, January 2014 to August 2024 – Charts – Data & Statistics – IEA
[6] DOE Releases New Report Evaluating Increase in Electricity Demand from Data Centers | Department of Energy
[7] Powering the US Data Center Boom: The Challenge of Forecasting Electricity Needs| World Resources Institute