Contractors know the recent blitz of data center announcements faces a much slower reality once construction breaks ground.

Data center plans eased in June from “extraordinary levels” earlier in the year, according to Dodge Construction Network, but the sector continues to be a dominant source of work for the nation’s largest contractors. Despite the sky-high demand, however, constraints around zoning and permitting are still top of mind for developers and contractors, said Eric Abrams, senior vice president of operations at Ryan Cos.’ mission critical sector.

For example, Ryan Cos. recently estimated that delays to one of its data center projects for Google could cost the firm an estimated $5 million or more. A judge found that an environmental group’s challenge raised sufficient questions about whether the environmental review process on the project complied with state requirements.

Those constraints are forcing builders to pick and choose carefully which projects they ultimately pursue, said Michael Beadle, senior vice president of operations at Ryan Cos.’ mission critical sector.

Here, Beadle and Abrams talk with Construction Dive about client relationships, project schedules and the direction of the data center construction boom.

Editor’s note: The following has been edited for brevity and clarity.

CONSTRUCTION DIVE: How are contractors becoming more selective about which data center projects to take on?

ERIC ABRAMS: Ryan Cos. is focused on working with clients who demonstrate a deep understanding of the challenges and complexities that data center projects present.

This means moving beyond a focus on initial costs to important discussions surrounding safety, quality and an ultimate shared vision surrounding the project. As general contractors, we are drawn to projects that highlight sustainability and innovation.

In turn, we team with clients who have a strong understanding of the program they aim to deliver and value a resilient, energy-efficient infrastructure of the future.

What’s the biggest misunderstanding people still have about how fast these artificial intelligence data centers can realistically be delivered?

MICHAEL BEADLE: A common misconception about data center construction is that the facilities can be built as rapidly as the software they support.

Construction timelines are determined by the constraints of the physical world and not digital innovation. These constraints include the availability of power and the procurement and assembly of specialized electrical and cooling equipment, which can take years given the current state of the global supply chain.

The AI revolution is happening at a fast pace, but the physical foundation is a marathon of strategic planning and execution. Those who plan well-ahead, move quickly when the market changes and are willing to lock in long-term partnerships with contractors and vendors find the most success in on-time delivery.

How important is site selection for these builds?

BEADLE: Site selection is arguably the most critical decision in data center development, as it dictates the project’s timeline, budget and ultimate viability.

The success of a project is tied to securing a site with access to a significant amount of reliable power, which requires strategic and lengthy relationships with utility partners. An ideal site must also have an ample amount of land in case of future expansion, a viable cooling strategy and a favorable regulatory environment for a streamlined permitting process.

A hyperlocal factor is the attractiveness of the site to the construction labor force. For example, this includes ease of access from where tradespeople live and local amenities near the site. We are seeing many subcontractors and suppliers choose the projects they pursue based on the preferences of their in-demand craft workers.

Using the experience Ryan Cos. has on data center construction, where do you see schedules slipping the most right now? Is it labor, equipment, power or something else?

ABRAMS: Navigating the complex web of zoning laws, permitting requirements and environmental regulations is a common cause of project delays.

Obtaining the necessary approvals can be a lengthy process, and evolving industry standards add another layer of complexity. Regulatory changes are another common surprise in schedules.

BEADLE: Even for clients with a great procurement team, the availability of long-lead electrical and mechanical equipment are challenges to schedules. Reliable off-site manufacturing and on-site start-up and testing labor are another challenge.

The volume of data center projects in planning or under construction now exceeds the equipment and material supply chains. That dynamic strains the “just-in-time” completion model of start-up and testing at the end of each project.

Any other trends that are important to mention around data center construction?

ABRAMS: More data center operators are adapting to a larger, industry-wide focus on sustainability.

An example of this is the shift from traditional air cooling to advanced liquid cooling systems. Newer facilities feature designs that specifically minimize water consumption and improve efficiency.

BEADLE: We’re also seeing increased power-density in data halls due to power consumption and the miniaturization of new chip technology.

Currently, electrical and mechanical equipment is driving building size rather than the space in the data hall. We expect this to continue to put pressure on how much power can be stacked into smaller areas, increasing the need for high-energy safety planning and hazard analyses prior to energization activities.