What will happen to the data centre sector in 2026?
As 2026 approaches, many in the data centre industry are looking to what will come next. The industry has entered the mainstream as demand continues to surge, driven by AI, cloud adoption, and further government investment. However, constraints on power, land, and engineering talent could stifle the growth the industry has been predicting.
To find out more about where the market is heading, engineers on our data centre team have shared their predictions for the year ahead.
A shifting global demand
Across Europe, data centres have grown substantially. Operators will need to look to enter and expand within markets where capacity can be delivered. Speaking on this, Barbara Sacha, Partner and data centre sector lead, said: “Looking ahead to 2026, data centre development will be shaped not only by power availability and land access, but also by surging AI and cloud demand, as end-user requirements steer developers toward strategic markets. Based on our current work, we see the UK and Germany continuing as key markets for Europe, with Spain and Poland keeping their momentum thanks to a combination of affordable land, growing renewable energy capacity, and strong connectivity. Spain’s position as a digital gateway between Europe, Africa, and Latin America, and Poland’s role as the largest data centre market in Central and Eastern Europe make them attractive for hyperscale and cloud deployments.”
Beyond Central Europe, northern Europe is re-emerging as a strategic hub. Barbara continues, “Meanwhile, the Nordics are experiencing a resurgence, driven by abundant renewable energy, naturally cool climates, and strong government incentives. As hyperscale operators invest in mega-campuses to support AI and cloud growth, the region offers a sustainable and scalable alternative to power-constrained European hubs.”
At the same time, the Middle East is entering a phase of unprecedented expansion: “Saudi Arabia is set to see a surge of activity with ambitious projects of unprecedented scale under Vision 2030. Early design input will be essential to deliver these mega-projects efficiently and meet the region’s digitalisation goals.”
On the other side of the world, APAC also continues to outpace other regions in terms of data centre growth. Discussing these changes, Alex Saez, Partner, highlighted: “The Asia-Pacific region is projected to be the fastest-growing market. Singapore remains a critical hub despite land constraints, with Malaysia emerging as a spillover destination offering lower costs and strong connectivity. India’s rapid digitalisation and cloud adoption are driving hyperscale investments, while Australia continues to attract projects thanks to its stable power grid and proximity to Asia’s major economies. Southeast Asian markets like Vietnam are beginning to gain traction as developers seek new growth corridors to meet rising demand.”
The talent shortage becomes a defining constraint
Even with the strong market demand, capacity cannot be delivered without engineers. As Andrew Livesey, Partner, explains, 2026 will intensify the challenge: “In 2026, the skills shortage will be an ever-growing pressure for the UK data centre industry. As the UK seeks to become an AI superpower and investment continues through AI growth zones and government-backed developments, the industry can’t keep pace without expanding the talent pool. The most effective way to do this is to widen participation and open doors to those who may not traditionally see engineering as a possible career; we must look to increase the diversity of the industry. After years of UK engineers delivering major projects across the globe, 2026 will show that their expertise is needed at home more than ever to account for the growing pipeline of data centre projects here.”
Discussing how the industry could do this, Andrew continues, “Apprenticeship opportunities will and should increase to meet this demand and to benefit the sector through a diverse workforce. Whilst they demand more training time, they bring in talent that might otherwise not reach the industry. Organisations like the Land Collective are already helping to bridge this gap by connecting people with engineering opportunities, and I’m proud to be a champion sponsor of this at Cundall.”
The prediction is clear. Unless the industry expands routes into engineering through apprenticeships, graduate schemes, and retraining pathways, the UK risks a shortage of the workforce it needs to meet demand.
Engineering priorities shift from cooling to powering
Over the last few years, operators have focused on cooling racks and, particularly, high-density AI workloads. However, speaking to the electrical side, Jamie Cameron, Partner, explains: “In 2026, the industry will shift from how we cool high-density AI racks to a tougher question: how we power them. Liquid cooling is now largely understood in design; however, the main disruptions will be on the electrical infrastructure. Large GPU clusters are creating spikes in power volatility when transitioning from periods of intense processing to data exchanging, this results in clusters jumping from 20-40% idle load to 140-160% in a few cycles before settling around 100% utilisation. Additionally, rack densities are pushing beyond 300kV with a roadmap towards over 2MW per rack.”
To address this volatility and density challenges: “This will drive development to keep pace with power demand. There will be a move towards 800V DC distribution to power the high-density racks more efficiently. Next-generation GPUs will be provided with supercapacitors to smooth out instantaneous peaks at the rack level, while at the campus level, medium-voltage Battery Energy Storage Systems (BESS) will be used to soften the impact of multi-hundred-megawatt step loads on the grid. We won’t see full-scale deployment in 2026, but we are likely to see proofs of concept and the standardisation of designs that will provide the foundation for the next generation of data centres.”
How will the year be defined?
Taking these predictions together, the perspectives shared suggest that 2026 will be a defining year for the industry. Between the rapid growth across geographies and the challenges arising from talent and power, each of these factors will become intertwined. Markets with power and land but not the talent will struggle; regions with AI demand but poor grid stability will face delays. However, by collaborating across the industry and using global knowledge-sharing practices, the industry can continue to grow.
