America's Data Center Boom Is Running Into Its Limits

The race to build the digital infrastructure underpinning AI and cloud computing is colliding with a set of risks the market wasn't built to handle. Three new articles from The Insurer based on interviews with leading expert Paul Brown at The Baldwin Group map the hurdles and opportunities.

Power, not capital, has emerged as the defining constraint on U.S. data center expansion. With more than 335 facilities under construction, vacancy at record lows, and hyper scale IT spending projected to exceed $260 billion in 2025, demand is outpacing the existing grid's ability to keep up.

The insurance market faces its own hurdles. Soaring AI computing density, lithium-ion battery fire risk, and fragmented coverage towers spanning multiple insurers are reshaping the risk profile of these facilities faster than traditional policy structures can adapt.

The Baldwin Group's Paul Brown advises on the need for a cross-industry practice approach in assessing risks, including underappreciated exposures - from orphaned oil and gas wells disturbed during rapid site preparation to refurbished, imported generation equipment pressed into service as a stopgap.

Taken together, these dynamics highlight an industry advancing faster than the systems designed to support it - and an insurance market racing to catch up.

Read the full reports →