154 upcoming data centre hubs are in climate-risk hotspots: Report

As billions of dollars pour into artificial intelligence and digital infrastructure worldwide, a new report warned that physical climate risks could severely disrupt the global data centre expansion. Titled ‘2026 Global Analysis of Planned Data Centres for Physical Climate Risk and Resilience’, the report examined 2,595 planned data centres globally across various categories, including hyperscale, colocation, and government facilities.

The report by the climate risk analytics firm Cross Dependency Initiative (XDI) highlighted that extreme weather events like coastal flooding, extreme heat and forest fires pose threats to the physically built data centers. It found that 154 of these upcoming digital facilities are already classified as high risk properties for physical climate damage under low-resilience construction settings. 

Data centres in this category face a high probability of structural damage within their operational lifespans, making insurance cost-prohibitive or completely unavailable. Almost half of these high-risk properties are located in North America.

Regionally, Asia faces the steepest resilience hurdles. South East Asia has the highest percentage of high-risk data centres at 20%, followed by East Asia at 13% and South Asia at 12%. Under a high-emissions climate scenario, the risk of physical damage in these regions is projected to more than triple by 2100. On a national level, Vietnam and Thailand rank first and second globally for projected physical damage risk, driven heavily by coastal inundation.

Local hazards

The report emphasised that broad national statistics often mask highly concentrated local hazards. For instance, while the US has a lower national risk average, state-level analysis reveals that the state of Oklahoma leads with 63-67% of its planned facilities classified as high risk, largely due to forest fire exposure. 

Internationally, Nouvelle-Aquitaine in France emerged as a premier global hotspot, where 100% of analyzed data centres are at high risk from coastal inundation under both standard and advanced resilience engineering settings.

Beyond direct structural damage, extreme heat is escalating into an operational threat. Sustained severe temperatures threaten the continuous uptime expectations crucial to modern digital systems. 75% or more of planned facilities in Brazil, India, Mexico, Indonesia, and Spain face acute operational disruption risks from rising temperatures, according to the report. 

“The global race to build AI infrastructure is accelerating at extraordinary speed," said Dr Karl Mallon, Founder and Head of Science and Technology at XDI. “Much of the debate has focused on energy demand and water consumption. But physical climate risk is becoming an increasingly important consideration in its own right. The question is no longer simply where the next generation of digital infrastructure gets built, but whether those assets can remain operational, insurable and economically resilient over their intended life.”

Crucially, the report warned that evaluating data centres in isolation underestimates the true scale of the problem. These assets remain profoundly dependent on surrounding infrastructure, including power grids, water supplies, and telecommunications. 

By analysing multiple data centres across Europe, the report found that the risk of operational disruption increases ten-fold when these indirect infrastructure and supply chain dependencies are factored in. Surrounding power grids and critical networks in countries like Spain, India, and the US often face significantly higher disruption risks than the data centres themselves.

Data centre insurance premiums projected by Swiss Re to more than double from US$10.6 billion today to US$24.2 billion by 2030. 

“Future risk is not fixed. Unlike existing infrastructure, planned data centres create a window of opportunity. Decisions made today about site selection, engineering standards and resilience investment may materially influence future performance, insurability and operational continuity,” said Mallon.