Hajra Naz
The concern is competition for the same resources. Data centre construction is accelerating at the moment state and local governments are borrowing heavily to fund long-delayed work on roads, bridges and water systems, and the two draw on the same municipal debt markets, the same contractors, and the same electrical equipment and grid connections. When data centre developers can pay more and move faster, public projects slip further down the queue.
Investment in roads, bridges, and other public infrastructure may increasingly fall behind as the pace of data center construction continues to accelerate, according to reporting from Bloomberg.
State and local governments are already borrowing heavily to fund long-planned infrastructure upgrades. In 2025, they sold a record amount of municipal debt for the second consecutive year, and strategists expect another roughly $600 billion in issuance next year. The bulk of that borrowing is earmarked for transportation, utilities, and other public works projects meant to modernize aging systems and support population growth.
At the same time, private investment is pouring into data centers at an unprecedented rate. Data from the U.S. Census Bureau shows that spending on data center construction is running at an annualized pace of more than $41 billion — a level that now roughly matches total state and local government spending on transportation construction nationwide.
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That overlap matters because these projects draw from the same limited pool of labor, materials, and specialized contractors. The construction industry is already grappling with workforce shortages driven by retirements, a lack of new skilled workers entering the trades, and tighter immigration policies under President Donald Trump. As demand rises on both the public and private sides, competition for workers is expected to intensify.
Executives across the construction and design ecosystem say the impact is already being felt. Andrew Anagnost, chief executive of architecture and design software company Autodesk, told Bloomberg there is “absolutely no doubt” that the surge in data center development is pulling resources away from other types of construction.
“Data center construction sucks resources from other projects,” Anagnost said, adding that many infrastructure initiatives are likely to face slower timelines as a result. “I guarantee you a lot of those projects are not going to move as fast as people want.”
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The growing tension highlights a broader challenge for policymakers and planners: balancing the private sector’s rush to build the physical backbone of artificial intelligence with the public sector’s need to repair and expand essential infrastructure. Without additional labor supply or coordinated investment strategies, experts warn that delays and cost overruns could become more common across both sectors.
Why this matters outside the United States
The squeeze described here is a wealthy-country problem in its specifics, but the underlying trade-off travels. Any government weighing a national AI buildout is choosing between compute and the ordinary infrastructure that compute depends on, power generation above all. For markets where that capital is scarcer, the arithmetic is harsher, which is part of the argument for building on the devices people already own instead of starting with data centres.
