Last Week in ConTech - 31 March 2025
Have we passed peak data centre construction?
Deep Insight: Have we passed peak data centre construction?
This week there was further analyst research that Microsoft has walked away from new data centre projects in the US and Europe. This move stems from their choice to scale back support for OpenAI’s additional training workloads.
With 4,750 data centres in construction in the US, it begs the question, are we past peak data centre construction?
This year the AI-related data centre construction spending by Big Tech will reach:
Amazon: $100b
Microsoft: $80b
Alphabet: $75b
Meta: up to $65b
It’s a huge amount of investment and executives at Microsoft have noted that the pace of growth should slow in the company’s next fiscal year.
To gauge where we are in this cycle, we can look at a similar pattern emerging in China.
When ChatGPT gained popularity in late 2022, the Chinese government designated AI infrastructure as a national priority. In 2023 and 2024 over 500 new data center projects were announced and by the end of last year, at least 150 were operational.
However, now local Chinese outlets are reporting that up to 80% of the newly built computing resources remain unused. Reports suggest that a shift in AI economics, exemplified by DeepSeek, has changed the Chinese AI industry’s focus from ‘Who can build the best large language model?’ to ‘Who can use them most effectively?’
What it means is that previously AI firms required large-scale computations for training models, making cheap energy and land the priority for data center construction.
But as AI applications shift toward real-time use, the demand is now for lower-latency infrastructure located near major tech hubs leaving many remote data centers in China underutilized.
Whether this trend and calculus is reflected in the US market remains to be seen. But with the rate of development in AI it means that by the time a data center is built, it may already be outdated.
Read more: China built hundreds of AI data centers to catch the AI boom. Now many stand unused (MIT Technology Review)
In this issue there are:
7 Startup Fundings
14 Policy and Regulatory Changes
6 New National Infrastructure Projects & Priorities
1 New investment funds
0 Acquisitions
7 News articles
42 new jobs posted - view here
Reading time: 10 mins
Note: Last week we had a guest article from Aaron Toppston, Managing Partner at GS Futures on ‘Exploring Technology in Civil Construction.’ Substack seemed to have some issues with delivering the newsletter due to the size of images, check it out here or respond to this email and I can forward it to you.
Startup Funding
Supply Chain
Buildvision, a North Carolina startup, raised $10m in Series A funding. They are building a commercial construction procurement platform which connects contractors directly with manufacturers and suppliers (instead of relying on independent personal relationships) to support a single place to source, purchase and track equipment in real time, integrating financing, logistics and supplier performance tracking. More here.
Notes:
Having written this newsletter for ~20 months now, this funding round is interesting to me as I remember covering their last round.
Previously in May 2024 I wrote about their solution and launch of Noräs AI which had 3 core features:
It uses AI to extract data from mechanical and electrical schedules and specifications.
Organizes mechanical and electrical equipment into one dashboard and pairing it with alternate equipment which meets the specifications.
Requests competitive quotes from multiple manufacturers and reps for the products.
Then in July 2024, Buildvision acquired SpecFrog, a startup which used AI for automated specification comparisons.
It's fascinating to see how the company has grown over time, focusing on an initial wedge, then acquiring and building new capability which now, when I review their website, allows them to present themselves as a full service procurement solution for commercial construction.
Green Materials
Terra CO2, a Colorado startup, received investment from CEMEX Ventures (undisclosed). They develop low carbon building materials offering a scalable alternative to replacing cement in concrete with two main proteins being an engineering supplementary cementitious material to address the fly ash shortage and Opus Zero which is a full substitute for clinker. More here.
Notes:
Terra CO2 raised $82m in Series B funding in February.
This investment does not appear to be a part of this round given the timing of the press release.
Cemex aims to integrate Terra CO2’s solutions across its operations in the Americas and Europe.
Workforce Management
Lumber, a Californian startup, raised $15.5m in Series A funding. They have developed a workforce management solution for SMB construction contractors which unifies workflows such as payroll, time tracking, compliance and onboarding to help manage costs and streamline payroll processes. More here.
[View open jobs - 1 role in Finance, 1 role in Customer Success]
Construction Management
Specter Automation, a German startup, raised €5m in Seed funding. They have developed a construction management solution which uses 3D models as the basis for site coordination. More here.
[View open jobs - 1 role in Sales, 1 role in Customer Success, 1 role in Software]
Notes:
Specter Automation allows users to understand the construction project status by making updates on a 3D model.
What it appears to do is to use a design model as the unit of structure and orientation for construction management.
Documents are tagged to components on the model and progress is shown via color representation on the model.
I’d be curious as to how the progress / live status is updated on the model as the challenge would be the upload of data i.e drones, cameras etc (it does appear users can manually check status as well).
Robotics
Renovate Robotics, a New York startup, received investment from Beacon (undisclosed). They have developed an autonomous roofing robot which installs asphalt shingles on residential roofs. More here.
[View open jobs - 1 role in Operations]
Business Management
Terial, a New York startup, raised $3m in funding. They have developed a management platform for commercial roofing contractors including features such as a CRM, Service Job Management, Project Management, Job Costing and Reporting. More here.
Other
Gaia Turbine, an Italian startup, raised €1.15m in funding. They develop plug-and-play hydroelectric micro and mini-turbines. More here.
Notes:
This solution is very early and yet to identify where and who they are selling to.
It could have interesting applications in cities or even remote construction sites.
Policy and Regulatory Changes
US
Trump order targets PLAs on federal jobs
An executive order rescinds a September 2024 action from former President Biden.
This had prioritized federal spending for projects that promote and benefit workers, such as collective bargaining agreements, which include PLAs.
Trump Orders States, Communities to Shoulder Resilience Investments
In an executive order Trump said it is now US policy for states, local governments, and individuals to “play a more active and significant role” preparing for wildfires, hurricanes, and other disasters.
It instructs a review of federal policies on critical infrastructure, national continuity, and preparedness and disaster response.
It requires the creation of a National Risk Register.
This identifies and quantifies ‘natural and malign risks to our national infrastructure, related systems, and their users.’
This will be used to inform private sector and state-level investments in resilience, and direct federal budget priorities.
US weighs funding cuts to four of seven hydrogen hubs
The U.S. Department of Energy is weighing funding cuts to four of seven hydrogen hubs that were selected under a $7 billion federal program.
The hubs are intended to jumpstart the production of "clean hydrogen" and the infrastructure needed to get it to industrial users like steelmakers and cement plants.
The four hubs targeted for cuts represent about $4 billion in pledged funding.
Judge overturns Washington natural gas measure approved by voters
A judge ruled that Initiative 2066 is unconstitutional.
The voter approved ballot measure seeked to slow Washington’s shift from natural gas toward technology like electric heat pumps and unwind changes to the energy code.
This run afoul of a provision limiting citizen initiatives to no more than one subject and requiring them to contain the full text of the portion of state laws they would alter.
NYC gas ban upheld in federal court
A judge ruled that federal law does not override New York City’s local statute banning gas and other fossil fuels in new buildings.
New York City’s local ban on fossil fuels in new construction started to go into effect in 2024 for buildings under seven stories.
Bans in larger buildings begin in 2027.
A similar ban on the state level is scheduled for buildings under seven stories in 2026 and for larger buildings in 2029.
California unveils first state plan to unleash heat pumps
In 2022 the Californian Governor set a goal to deploy 6 million heat pump units by 2030.
An estimated 1.9 million have been installed so far.
They need to deploy an estimated 23 million heat pumps to decarbonize its residential and commercial sectors by 2045.
Trump’s Solar Permitting Pause Is Over, BLM Says
Trump paused permitting for solar projects for 60 days on his first day in office.
This expiration date has passed and there is no freeze on processing renewable applications for solar.
$900 Million Available to Unlock Commercial Deployment of American-Made Small Modular Reactors
The DOE re-issued a $900 million solicitation to support the deployment of small modular reactors.
DOE is offering funding to de-risk the deployment of Generation III+ light-water small modular reactors (Gen III+ SMR) through two tiers:
Tier 1: First Mover Team Support
Up to $800M to support up to two first mover teams of utility, reactor vendor, constructor, and end-users/off-takersTier 2: Fast Follower Deployment Support
This will provide approximately $100M to spur additional Gen III+ SMR deployments.
Small Business Administration launches ‘Made in America’ manufacturing effort
The SBA initiative is aimed at reshoring manufacturing.
As part of this it is looking at making it easier for people to qualify for small business loans, including for real estate, construction and equipment purchases.
UK
UK Plans £600 Million to Train More Skilled Construction Workers
The funds are targeted at training up to 60,000 more skilled construction workers.
This is to address labor shortages and help build 1.5 million homes.
The announcement includes £100 million to fund 10 Technical Excellence Colleges and £165 million of fresh funding to help colleges deliver more construction courses,
Sweden
Sweden Announces Higher Tax Aid to Support Construction Sector
Sweden plans to temporarily raise a tax rebate homeowners can claim on eligible renovation projects.
The rebate is currently capped at 30% of labor costs associated with home repairs, conversions and extensions.
It would be raised to 50% from May 12 to Dec. 31 under the proposal.
India
Highway construction target for FY26 set at 10,000 KM
The government has set the aim of building 10,000 km of highways in the next financial year and raising Rs 30,000 crore (~US $3.4b) from monetisation of road assets.
Chennai Corporation Council approves draft construction and debris waste management rules
Construction and demolition waste is often dumped on roadsides, sidewalks, vacant plots, and burial grounds.
The draft guidelines classify waste into construction, demolition, and excavation.
Some other public suggestions included contractor led debris removal, an online system to report debris encroachment and request transport service and an app for the sale of debris and advocating its use for infrastructure projects.
China
China Sets Softer Carbon Caps for New Industries Added to Market
The regulator has confirmed that steel, aluminum and cement companies will participate in emissions trading this year.
The expansion will add about 1,500 firms to China’s carbon market, which currently only includes power generators.
This will eventually be expanded to include other sectors including building materials.
National Infrastructure Projects & Priorities
US
UAE Pledges $1.4 Trillion US Investment After Trump Meeting
This is to strengthen economic ties and will accelerate investments in artificial intelligence, advanced technology, infrastructure, energy, and healthcare.
They have been seeking to boost investment in a bid to purchase semiconductors.
Doing so will support their push to become a regional AI leader.
In 2024, the United States saw 12.3 gigawatts of storage installed.
This is up 33% over 2023.
Texas and California experienced the most growth in grid-scale storage specifically, with 61% of the country’s total installed capacity across the two states.
Nvidia, Musk's xAI to join Microsoft, BlackRock and MGX to develop AI infrastructure
Nvidia and Elon Musk's xAI have joined a consortium backed by Microsoft, investment fund MGX and BlackRock to expand AI infrastructure.
They will initially invest more than $30 billion in AI-related projects.
Sovereign wealth fund ADQ and American private equity firm ECP, have signed a deal for a $25 billion investment partnership.
This is dedicated to increasing power generation, primarily in the U.S., to serve data center needs.
Hyundai to invest $21B in US manufacturing
As part of the investment, Hyundai plans to build a $5.8 billion steel plant in Louisiana.
Hyundai’s CEO stated “We are definitely trying to localize the production, which will minimize the potential impact from the tariffs,” on an earnings call.
China
China’s Energy Transition at Odds With Solar Glut, Cheap Power
Chinese spending on renewable energy dwarfs its rivals, with over $800 billion or 4.5% of its GDP, invested last year.
China is still expected to add around 300 gigawatts annually over the next decade.
Investment funds
2150, a London venture firm, closed €200m for their second fund. They invest in urban tech solutions which impact how our cities are designed, constructed and powered, for good. More here.
News
Builders Stockpile Lumber, Swap Out Materials to Work Around Tariffs (Wall Street Journal)
More than 70% of imported softwood lumber and nearly one-third of the imported gypsum used for drywall come from Canada and Mexico.
China built hundreds of AI data centers to catch the AI boom. Now many stand unused.
In 2023 and 2024, over 500 new data center projects were announced.
At least 150 of the newly built data centers were finished and running by the end of 2024.
America’s infrastructure notches first-ever ‘C’ grade (Construction Dive)
JLL Spark’s expansive view of strategic proptech investments
Spec Homes Sitting on the Market Pose Potential Economic Drag
Spec, or speculative homes are usually more affordable and available much more quickly for people who don’t demand their own personal touches.
The construction of these homes, since the start of COVID, jumped 41%.
Today, the market is seeing a pivot as some contractors reduce production of spec residences, which now account for more than half of all single-family construction.
Green Investors Are Finding Bargains in Trump’s Big Oil Era
Renewable power assets have now become a buyers’ market.
Transforming India’s Urban Landscape
This article breaks down the Urban Governance Framework for India including how urban local bodies operate.
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.
Might need to revise the date in the title!