Data Center Spending Set to Exceed $21 Trillion by 2028: Implications for Developers

Executive Summary

Data center spending is projected to more than double, surpassing $21 trillion by 2028—a trajectory that repositions digital infrastructure as one of the most capital-intensive build-out cycles in modern history. Developers who move early on powered land, transmission-adjacent sites, and utility partnerships stand to capture outsized returns. Utilities and grid operators face a mounting load-growth challenge with little margin for delay. For InfraSale users, this signals an urgent recalibration of land acquisition timelines, permitting strategy, and interconnection positioning.

What Happened

Data center spending is on course to exceed $21 trillion globally by 2028, more than doubling current investment levels, according to reporting from Reuters. The projection reflects accelerating demand driven by artificial intelligence workloads, cloud expansion, and enterprise digitization—all of which require physical infrastructure at a scale the market has not previously absorbed.

The headline figure lands at a moment when capital is actively rotating into hard infrastructure assets. Investor appetite for digital infrastructure—co-location facilities, hyperscale campuses, edge deployments—has intensified following years of yield compression in traditional real estate and fixed income.

Industry context: While the Reuters report does not break out U.S.-specific capital figures, domestic data center construction has historically represented a disproportionate share of global spending given the concentration of hyperscale operators, cloud providers, and AI compute demand in U.S. markets.

The Windward Bio IPO filing, cited in the underlying alert, reflects the same macro dynamic: renewed risk appetite from institutional investors willing to underwrite long-duration infrastructure themes. The rotation is broad, and data centers are at the center of it.

Source: Reuters via Google Alert

Why This Matters

A $21 trillion spending projection is not an abstraction—it translates directly into megawatts reserved, acres entitled, and interconnection queue positions filed. Every hyperscale campus under development today represents a downstream wave of substation upgrades, transmission line extensions, and water rights negotiations that will play out over the next three to five years.

The second-order effect is land scarcity. As the hyperscalers and their tier-one contractors move to lock up sites with existing power access and favorable permitting environments, the competitive window for developers and landowners narrows. Markets that were considered secondary—secondary Midwest metros, smaller Sun Belt cities, rural counties near transmission corridors—are being repriced in real time.

Job creation and local tax base expansion give state and county governments a strong incentive to streamline permitting for qualified data center projects. Industry context: Several states have already enacted data center tax exemption frameworks specifically to attract this capital. That policy tailwind is unlikely to reverse during a period of projected spending growth of this magnitude.

The risk, however, is concentration. Communities that absorb multiple large-scale data center developments simultaneously face water stress, grid congestion, and community opposition—dynamics that have already played out in Northern Virginia, Phoenix, and parts of the Pacific Northwest.

Power & Interconnection Impact

At $21 trillion in projected spend, the power demand implications are severe. Industry context: A single hyperscale data center campus can draw between 100 MW and 1 GW of load at full build-out, and interconnection timelines in constrained ISO queues—PJM, MISO, ERCOT, CAISO—currently run three to seven years in many regions.

Utilities serving high-growth corridors are already flagging load forecasts that exceed previous planning horizons. Transmission capacity that was adequate five years ago is now a hard constraint. Developers seeking to site new data centers must account for the realistic gap between interconnection application and energization—a timeline that can easily exceed the construction timeline for the facility itself.

The practical implication: sites with existing substation capacity, on-site generation options, or behind-the-meter power arrangements carry a material premium. Developers who control those assets—or who can structure agreements with utilities willing to fast-track dedicated service—are positioned to compress time-to-revenue significantly.

PPAs remain a central financing tool for large-scale data center operators committed to clean energy targets. Assumption: The growth in data center load will increase competition for high-quality renewable PPAs in constrained markets, pushing project prices upward and lengthening contract negotiation timelines for new entrants.

Land, Zoning & Permitting Impact

The land competition driven by data center expansion is already visible in markets like Northern Virginia's Prince William County, Phoenix's suburban corridors, and Central Texas. As the $21 trillion spending wave builds, that pressure will migrate to secondary and tertiary markets where existing power infrastructure intersects with lower land costs and less entrenched opposition.

Zoning is not a passive backstop. Local governments in high-growth markets have responded with moratoria, use restrictions, and conditional approval requirements tied to water usage, noise mitigation, and community benefit agreements. Developers who treat entitlement as a checkbox rather than a negotiation will face delays that erode pro forma returns.

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Environmental review timelines are a material risk in markets with state-level environmental impact assessment requirements. Assumption: As data center footprints grow—particularly facilities requiring significant water for cooling—NEPA-adjacent review processes will extend, and opposition groups will become better organized and better funded.

Strategic site selection now requires simultaneous underwriting of power availability, zoning pathway, permitting timeline, and community relations. Developers who build internal competency in all four disciplines—or who partner with firms that have it—will close deals that more narrowly focused operators cannot.

Investment Takeaway

Powered land commands a premium. Sites within reasonable distance of high-capacity substations, with clear interconnection pathways, are the scarcest input in the data center development stack. Control of those sites is a durable competitive advantage.
Secondary markets are repricing now. Capital is moving beyond saturated primary markets. Developers and investors who have already optioned land in emerging corridors are ahead of the cycle.
Utility partnerships are a dealmaking skill. Projects that come to market with a utility MOU or a committed service territory upgrade in hand are fundamentally de-risked relative to those that do not.
Permitting timelines must be underwritten conservatively. Assumption: Investors underwriting 24-month entitlement timelines in contested markets should stress-test against 36–48 months, particularly in jurisdictions with active community opposition.
PPA competition will intensify. Clean energy commitments from hyperscale tenants will tighten the renewable PPA market, increasing the value of projects with existing offtake agreements or co-located generation assets.

InfraSale Market Angle

For developers on InfraSale, the $21 trillion projection is an actionable signal, not a headline. The sites that will transact at premium valuations over the next 24 months are those that are already entitleable, already within reach of adequate power, and already documented with the interconnection and permitting detail that institutional buyers require.

Landowners with acreage near high-capacity substations or transmission corridors should be moving to document and position those assets now—before the competitive window closes in their markets. Developers sourcing new sites should be filtering first by power availability, then by permitting pathway, not the other way around.

Utilities and local governments seeking to attract data center investment should treat streamlined permitting and dedicated utility service agreements as the primary competitive tool. Tax incentives matter, but power certainty closes deals.

Market Signal

Location: Unspecified
Primary Issue: Data center investment growth
Infrastructure Theme: Land development
Who Benefits: Developers, investors, and utilities looking to capitalize on market growth.
Who's at Risk: Stakeholders facing regulatory challenges and competition for land acquisition.
InfraSale Takeaway: Developers should reassess land acquisition and permitting strategies in response to the data center boom.

Take Action

The $21 trillion data center spending cycle will produce winners and losers based almost entirely on who controls the right land, power, and permitting position. Developers who move on site identification and documentation now will be ahead of a capital wave that will intensify through 2028. Browse available powered land and DC sites.

FAQ

How can developers capitalize on the rising data center investment trend?

The highest-leverage entry point is controlling land with verified power access and a clear permitting pathway before institutional capital fully reprices those assets. Partnerships with utilities and municipalities willing to co-develop infrastructure solutions—dedicated substations, expedited permitting tracks—can further compress development timelines and improve project economics.

What zoning challenges should developers anticipate as data center demand grows?

Local governments in high-demand markets are increasingly imposing use restrictions, conditional approvals tied to water and noise mitigation, and community benefit requirements. Developers should engage planning departments and community stakeholders early in the site selection process, not after an application is filed, to identify and address potential friction points before they become project-killing delays.

What are the implications of increased data center demand for utilities?

Utilities face load-growth forecasts that outpace existing transmission and substation infrastructure in most high-demand regions. To remain competitive service providers—and to capture the economic development value of data center tenants—utilities will need to accelerate capital planning cycles, engage with developers earlier in the site selection process, and develop dedicated large-load interconnection programs.

Why does interconnection queue position matter so much for data center developers?

Interconnection timelines in major U.S. ISOs currently run three to seven years in many corridors. A data center facility can be permitted and constructed faster than a new transmission interconnection can be approved and built. Sites with existing substation capacity or behind-the-meter generation options eliminate or reduce this bottleneck, making them materially more valuable than raw land with no power infrastructure.

How will the $21 trillion data center build-out affect land values in secondary markets?

As primary markets—Northern Virginia, Phoenix, the Dallas Metroplex—become constrained by power scarcity and permitting resistance, capital will systematically move to secondary markets near transmission infrastructure. Industry context: This repricing is already underway in parts of the Midwest, Southeast, and rural Sun Belt, and it is expected to accelerate as hyperscale operators finalize long-range capacity plans through 2028.