JLL Rejects Data Center Bubble Fears Amid AI Boom

JLL says the global data center boom is being driven by real demand rather than speculation, as AI, cloud expansion, and hyperscale investment continue to fuel growth. In Mexico, that trend is reinforcing the country’s position as a rising digital infrastructure hub, although energy, permitting and talent constraints remain key challenges.

Fears of a data center real estate bubble are rising as AI accelerates demand for digital infrastructure, but JLL argues that market fundamentals still support sustained growth rather than speculative excess. In its 2026 Global Data Center Outlook, the firm says the sector is in an infrastructure investment supercycle, driven by AI, cloud expansion and new digital use cases, with nearly 100GW of new capacity expected globally between 2026 and 2030.

JLL projects the global data center sector will grow at a 14% compound annual growth rate through 2030, taking existing capacity from 103 GW in 2025 to 200 GW by the end of the decade. That buildout could generate US$1.2 trillion in real estate asset value and require roughly US$870 billion in new debt financing. Once tenant spending on GPUs, servers and networking equipment is included, total expenditures could approach US$3 trillion.

Despite the scale of investment, JLL says current indicators do not point to a bubble. Global occupancy stands at 97%, landlords retain pricing power and supply remains constrained by power shortages, long construction lead times and limited execution capacity. Rather than signaling oversupply, JLL suggests the sector’s high barriers to entry are filtering out weaker speculative projects and concentrating development among better-capitalized players.

The firm identifies electricity access as the sector’s biggest bottleneck. Power, not location or cost, is now the primary site-selection criterion, as multiyear delays for grid interconnection push operators toward self-generation, private wire agreements and battery storage systems. JLL notes that some markets have effectively adopted a “bring your own power” model, underscoring how energy strategy is becoming central to data center development worldwide.

Construction pressures are also intensifying. JLL says 57% of data center projects experienced delays of three months or more in 2025, while average global construction costs rose from US$7.7 million per MW in 2020 to US$10.7 million per MW in 2025. For 2026, it expects costs to rise another 6% to US$11.3 million per MW.

Mexico Emerges as a Key Regional Player

That global backdrop is increasingly relevant for Mexico, which Prodensa identifies as one of Latin America’s most attractive digital infrastructure markets. 

According to its Data Centers 2025: Mexico’s Digital Future report, Mexico is now the region’s second-largest data center market after Brazil, supported by its geographic position, connectivity with the United States, competitive operating profile and growing digital demand.

Prodensa estimates Mexico’s market volume will grow from 357.82 MW in 2024 to 480.3 MW in 2029, while market size rises from US$4,590.23 million to US$6,655.8 million over the same period. Installed racks are projected to increase from 89,455 to 120,094, and total raised floor area from 1.78 million sq. ft. to 2.4 million sq. ft.

The report also points to a substantial pipeline of investment. Mexico has 109 operational data centers, 21 under construction and 73 in the planning phase, while the Mexican Data Center Association projects US$9.2 billion in direct investment and US$27.6 billion in indirect investment by 2029. Prodensa adds that the sector’s contribution could reach 5.2% of GDP, equivalent to US$73.5 billion, by the end of the decade.

Queretaro remains the center of that expansion. Prodensa says the state concentrates 65% of Mexico’s installed data center capacity and has attracted more than US$17 billion in investment, with 26 projects under development totaling 600MW. Major projects include Microsoft Azure and AWS, each at 345 MW, CloudHQ at 288 MW and Ascenty at 73MW.

Domestic Constraints and Connectivity Opportunities

Still, Mexico faces many of the same constraints JLL highlights globally. Prodensa identifies electrical infrastructure as the industry’s main challenge, warning that data center electricity demand in Mexico could rise by as much as 400% in the coming years and require at least 1,500 additional MW. 

By 2030, data centers could consume about 18 TWh, more than 5% of projected national electricity consumption. Energy costs are also a concern, with local costs above US$100/MWh compared with US$50 and US$70 per MWh in competitive US markets..

Beyond electricity, regulation and talent are emerging as critical constraints. Prodensa says permitting processes such as land-use changes can take up to two years. 

The industry also faces shortages of specialized engineers, cooling technicians and cybersecurity professionals. At the same time, it argues these challenges are creating opportunities for renewable power, battery storage, free cooling, liquid cooling and new regional hubs beyond Queretaro, including Monterrey, Guadalajara, the Bajío corridor and Mexico City–State of Mexico.

Connectivity is another reason Mexico is drawing attention. Prodensa highlights projects such as the 1,000 km fiber corridor from Axtel between Queretaro and Texas.

Other key projects include the 2,500 km route from C3ntro Telecom between Phoenix and Queretaro, and the Zayo-Fermaca corridor linking northern and central industrial hubs. These projects strengthen cross-border interconnection and reinforce the position of Mexico as a bridge between the US and Latin America.