Rising investment in data center construction is increasing competition for labor and resources, potentially delaying road, bridge, and transportation upgrades funded by state and local governments, according to reporting by Bloomberg.
Record Public Spending Meets Private Data Center Growth
State and local governments sold a record amount of debt in 2025 for the second consecutive year, Bloomberg reported, with strategists expecting another $600bn in debt issuance next year. Most of that funding is expected to support infrastructure projects, including transportation, utilities, and public works.
At the same time, U.S. Census Bureau data cited by Bloomberg shows private spending on data center construction has reached an annualized rate exceeding $41bn. That figure is roughly equivalent to what state and local governments currently spend on transportation construction, placing both sectors in direct competition for construction capacity.
Labor Shortages Add Pressure
The overlap in construction timelines comes as the industry faces ongoing labor constraints. Retirements among skilled workers and tighter immigration policies under President Donald Trump have reduced the available workforce, intensifying competition between public infrastructure projects and private-sector developments.
Andrew Anagnost, chief executive of architecture and design software firm Autodesk, told Bloomberg that the impact is already evident. He said data center projects draw heavily on shared labor pools and materials, limiting availability for other builds.
Potential Delays to Public Works
Anagnost said the strain on resources is likely to slow infrastructure upgrades. He told Bloomberg that many publicly funded projects will not advance at the pace policymakers and communities expect, given the competing demand from large-scale data center construction.
The situation highlights growing tension between public investment priorities and private-sector expansion as demand for cloud computing and AI infrastructure continues to rise.
Featured image credits: RossandHelen
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