Major technology firms are investing billions of dollars in new data center facilities, power supplies, and computing resources creating one of the fastest-growing sectors in the U.S. construction market. For architecture and engineering (A/E) firms this represents a significant business opportunity. However, while the design itself can be generally straightforward compared to hospitals, laboratories, or complex industrial facilities, the overall project risk profile has its own unique challenges.

Opportunities
There are more than 3,100 data centers in operation and approximately 1,800 in various stages of development in the U.S. The largest concentrations are in Northern Virginia, the nation’s largest data center market, followed by Dallas-Fort Worth, Phoenix, Silicon Valley, Chicago, Atlanta, Central Ohio. Rapidly expanding markets include; Oregon, Utah, Iowa, and North Carolina. These locations share common characteristics including access to reliable electrical infrastructure, fiber connectivity, available land, and favorable business climates.

Design Features
From a design perspective, data centers are highly specialized but relatively repetitive facilities. Their primary purpose - provide secure, uninterrupted environments for servers and networking equipment. Architectural design - emphasizes security, durability, controlled access, and efficient building layouts. Structural - accommodate heavy equipment loads. Mechanical – design sophisticated cooling systems capable of operating continuously. Electrical - responsible for redundant power distribution, backup generation, battery storage, and uninterrupted power systems (UPS). Fire protection, cybersecurity considerations, and resilience against natural hazards are also essential design elements.

Unlike other complex building types, the technical design requirements are generally well established. Most experienced A/E firms can successfully deliver these facilities by following proven design standards aligning with project owner requirements. As a result, traditional professional liability exposures associated solely with design errors may actually be moderate when compared with more technically challenging, one-off project types.

Data Center Risk
Risk for design firms can stem from items outside their control; supply chain disruptions, labor shortages, utility constraints, and rapidly evolving technology demands. Long lead times for electrical switchgear, transformers, generators, chillers, and specialized cooling equipment can delay projects for months increasing costs. In some cases, procurement schedules now drive the overall construction schedule rather than the design itself.

Electrical infrastructure presents another significant challenge. Many utility providers simply cannot deliver the enormous electrical capacity required by modern hyper-scale data centers within desired project schedules. It is estimated that data centers will requirement 20 percent of the nation’s electricity consumption in 2035 compared to 5.9 percent today. 

Transmission line improvements, substation construction, and regional grid upgrades frequently become critical path items that are completely independent of the A/E firm’s responsibilities.

Skilled labor shortages further compound project risk. Contractors often struggle to secure qualified electricians, mechanical installers, commissioning specialists, and controls technicians capable of supporting multiple large projects simultaneously. Construction delays resulting from workforce limitations may ultimately generate claims involving schedule impacts and increased costs, even when design services were completed on time.

Community opposition is also becoming a growing project risk. Residents increasingly question the visual impact, noise generated by backup generators and cooling systems, water consumption, and enormous electrical demand associated with new facilities. Public resistance can delay permitting, trigger redesign efforts, or lead to litigation unrelated to the quality of the professional services provided by the design team.

Risk Management
For project managers, these realities reinforce an important risk management principle: project risk extends well beyond design quality. Successful firms evaluate client experience, expectations, project financing, permitting challenges, utility commitments, contractor qualifications, procurement strategies, and regulatory uncertainty before accepting an assignment. Understanding these external risks allows firms to negotiate appropriate contracts terms, define realistic schedules, document assumptions, and establish communication protocols that help distinguish design responsibility from broader project issues.

Conclusion
As demand for digital infrastructure continues to accelerate, data centers will remain an attractive market for A/E firms. The most successful firms are those that recognize that the greatest professional risk is often not in designing the facility, but in managing expectations and identifying, documenting responsibilities of others regarding the numerous external factors influencing project outcomes. Effective project management and establishing enterprise-wide risk management programs are essential for a success, profitable project and protecting your firm from litigation.