With Speed At A Premium, Big Tech Data Centers Are Going Modular

After years of custom‑built facilities, data center developers are charging into modular construction. The shift is accelerating delivery timelines — and creating a new set of headaches for the teams trying to keep up.

Developers and data center providers have generally had to individually design every building and component to a tenant’s latest specifications, from the physical shell to cooling and electrical systems, because of minimal standardization and fast‑shifting technical requirements.

Now, as modular construction gains traction in the data center world, it’s creating its own challenges and forcing a fundamental rethink of design and delivery, even as modularized approaches accelerate so quickly that they’re surprising some of the shift’s earliest proponents.

“The industry quickly went from modular emerging to modular prevailing,” said Gensler principal David Fanning, speaking at Bisnow’s Data Center Investment Conference & Expo Pacific Northwest. “We are seeing from the architect side that the designs are changing overnight — something that may have been more of a traditional design that's already pivoted to a more of a modular solution.”

As tech giants have prioritized construction speed amid an artificial intelligence infrastructure arms race, the use of modular designs and prefabricated components has quickly become a core strategy for delivering hyperscale data centers. Grand View research predicts the entire modular data center market will top $70B by 2030, up from $29B in 2024.

Modularization is colliding with the breakneck pace of data center design changes, as constantly evolving IT hardware forces developers to build flexible units that won’t become obsolete within months.

That same churn is reshaping whole‑building layouts, requiring wider pathways, stronger structures and new methods for moving massive prefabricated components in and out of facilities, a shift that comes with significant cost.

Few companies are building hyperscale data centers that are fully modular, with entire buildings assembled from preconstructed data center pods like a giant Lego project. The push toward modularizations is more commonly taking the form of the various components and systems within a data center being prefabricated off-site. 

Major developers like EdgeConneX, CyrusOne and Compass are now building certain data centers, including cooling infrastructure, power systems and structural components, almost entirely from modular components.

Hyperscalers and the developers who serve them face a growing list of constraints slowing the delivery of new data centers, from yearslong wait time for power from utilities to growing community pushback that has lengthened permitting and entitlement timelines. Facing these speed bumps, firms are placing a premium on delivering facilities quickly once construction is finally able to proceed.  

Big Tech’s prior resistance to modular construction was largely economic, said Rishab Harikrishnan, a principal hardware manager at Oracle. 

Modular construction requires a significant up-front investment. Hyperscalers must change the facility designs they have used for years, while suppliers and builders must rethink processes and designs and establish manufacturing sites and workforces. This financial risk wasn’t worth it until the AI boom increased the size of each new facility and sent demand for new data centers skyrocketing. 

“While modular was a concept that we spoke about, it didn't make economic sense — we didn't have the urgency or the speed to push it, and we didn't have the need to scale it up,” Harikrishnan said. “Now, everyone's willing to take the risk to make things modular so that we can get things as fast as possible. Construction times have reduced from two years to about 30 weeks right now purely because of modularizing every single component.”

A shortage of skilled construction labor has also accelerated the shift toward modular data center builds. Developers and contractors are increasingly forced to import hundreds, sometimes thousands, of specialized workers from across the country, and projects are often delayed while waiting for electricians and other critical tradespeople to become available.

Modular construction offers a way around those constraints. By shifting much of the work off-site to centralized manufacturing facilities with stable workforces, developers can reduce the need for skilled labor in the field and bring greater predictability to construction timelines, industry insiders say.

Modularization also helps alleviate the supply chain constraints that continue to plague the sector.

Hyperscalers’ use of proprietary designs for nearly every data center component has limited builders' options when it comes to procuring parts, with only a small number of manufacturers able to provide a specific component. Modularization has led to parts becoming more standardized, injecting far more flexibility into the marketplace for both manufacturers and data center builders. 

“There's a huge vendor pool, but each hyperscaler having bespoke designs means we can't standardize or scale up on similar solutions, so the industry is definitely going more and more modular in every aspect,” Harikrishnan said.

Panelists pointed to the tension between modularization and the rapid pace of change in data center design requirements. Manufacturers of IT equipment like Nvidia continually upgrade their product lines, and each generation of graphics processing units, or GPUs, and other critical computing gear requires different supporting infrastructure.

That includes stronger floor plates to accommodate increased weight from liquid cooling systems and electrical units capable of providing more power per square foot.

Designs can change multiple times over the course of a project. With such a rapid pace of change, modular units must be designed with flexibility to avoid obsolescence, years or even months after they are manufactured. 

“The question is: How do we make sure that we have the space and the ability to change things more easily going forward?” said Kevin Imboden, global director for market research and intelligence at EdgeConneX. “The challenge is: All of that comes with a cost.”

The fact that modular data center components will need to be replaced in the near future is also changing the overall design of data center buildings. 

Previously, data centers were built with the assumption that when equipment needed to be replaced, it would enter and exit the building piece by piece. Now, fully constructed modular cooling or power units present challenges simply because of their size.

Basic design elements of a data center, including the size of doorways, the width of hallways, the location of outdoor paths and the strength of ceilings, all have to be reconsidered to accommodate the need to move massive components in and out of the facility. 

“We’re looking at ways to rapidly deploy modules into the building, the ability to drive a truck into the building, have an overhead gantry crane that lifts that module off of the truck, sets it into a clean room, preps it for delivery, and then you skate it into place with a designated pathway,” Clark Pacific Director of Mission Critical Preconstruction Blake Roskelley said.