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Hunger games: The data centre race for power, land and water
10/2/2026
Michael Lewis
Head of Research, ESG
IN A NUTSHELL
- Data centers are the new power giants, driving a new investment wave in energy grids, hyperscale colocation facilities and commodity markets
- However, scarce land and water, slow permitting, and overloaded utilities are testing grid capacity, threatening climate goals and sparking new battles over energy availability
- For investors, data centres are no longer just a digital theme but also a full-stack infrastructure story offering a range of investment opportunities
Introduction
Over the last decade, data centres (DCs) have shifted from being background infrastructure to a central pillar of the global economy, Hyperscale operators, namely the big cloud and AI players, have led this charge as the number of large hyperscale data centres have nearly doubled from under 600 to around 1,189 by early 2025, representing roughly 44% of global data centre capacity.[1]
The rapid expansion of data centres is therefore emerging as one of the most important shifts in global infrastructure. Their rising energy footprint is reshaping power demand trajectories, particularly in the U.S., parts of Europe and other emerging hotspots. As data-processing intensity accelerates, utilities and grid operators face pressure to deliver reliable electricity at unprecedented scale, while policymakers in certain jurisdictions struggle to reconcile this surge with decarbonisation goals.
However, this growth is constrained by a complex set of bottlenecks that extend far beyond electricity. These include permit-ting hurdles and land and water availability which are driving where and how quickly new facilities can be built. These chal-lenges are catalysing a new wave of innovation from advanced cooling technologies and on-site generation to smarter grid management. At the same time, the digital economy’s footprint is reverberating through global commodity markets as data centre construction and operation are intensifying the demand for commodities such as copper, aluminium, steel and rare earth metals.
For investors, these intersecting forces are creating both challenges and opportunities. Understanding how energy con-straints, grid modernisation, materials demand and policy direction are shaping the future of the digital economy will be es-sential to identify where capital is most at risk and where it stands to benefit from what is likely to be one of the most im-portant infrastructure transformations of the decade. In this paper, we explore these trends by examining the energy footprint of data centres as well as identifying the challenges and the possible investment opportunities that might lie ahead.