First Street Finds 80% of Datacenters Face Climate Hazards Across 97 Global Markets
Updated
Updated · The Guardian · Jun 23
First Street Finds 80% of Datacenters Face Climate Hazards Across 97 Global Markets
3 articles · Updated · The Guardian · Jun 23
Summary
Nearly 80% of datacenters are exposed to acute climate hazards—flooding, extreme winds and wildfires—according to First Street’s review of 97 global markets, raising risks of outages, higher repair bills and costlier insurance.
Another 54% of datacenter markets face chronic threats such as extreme heat and drought, which can strain cooling, water supply and long-term operating reliability as historical underwriting models lose predictive value.
The Americas carry the heaviest acute-risk exposure, with 86% of capacity in elevated-risk markets, versus 60% in Asia-Pacific and 25% in Europe, the Middle East and Africa; Asia-Pacific is most exposed to heat and drought at 89%.
U.S. hotspots including the Carolinas, Atlanta, New York-New Jersey and northern Virginia rank among the most exposed regions, while fast-growing markets such as Johor and Marseille are also vulnerable even as lower-risk places like Helsinki expand more slowly.
The findings add to warnings that the AI-driven datacenter boom is expanding in climate-stressed areas, meaning disruptions can spread beyond facilities to digital services and intensify local competition for power and water.
Could a single climate disaster targeting a datacenter hub trigger a widespread internet collapse?
Is the AI boom building our digital future on land that is destined to flood, burn, or dry out?
Will community backlash over strained resources become the biggest hurdle for AI infrastructure growth?
Data Centers Face Escalating Climate Risks: Billions in Assets and Critical Infrastructure at Stake
Overview
This report highlights the urgent and growing threat that climate change poses to the global data center industry, as revealed by the June 2026 First Street study. It shows that many of the fastest-growing data center markets are also the most vulnerable to climate risks, yet current investment strategies often overlook these dangers. The study emphasizes that location is crucial for long-term costs and reliability, with climate factors like cooling and water playing a major role. Despite this, most data center valuations still focus on growth, treating climate concerns as secondary, which leaves critical infrastructure exposed to escalating hazards.