Nicholas Institute for Environmental Policy Solutions
August 2025

Hyperscaler Data Center Buildout: A Sustainability Bane, Boon, or Both?

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Hyperscalers are large-scale cloud computing providers that operate massive data centers to support global digital services. The rapid expansion of hyperscale data centers is driven by increasing demand for cloud computing, artificial intelligence, big data analytics, and digital transformation across industry and government. These data centers can provide services such as computing and storage at enterprise scale but consume large amounts of energy and water to do so, posing sustainability challenges. This report surveys sustainability concerns related to digital infrastructure expansion and identifies areas where collaborative, pragmatic policy and technological solutions can help address them.

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