More than half (51%) of the $670 billion worth of planned U.S. data center projects are located in states with a high risk of severe convective storms (SCS), according to new analysis from specialty insurance company MS Amlin.
MS Amlin’s analysis examined more than 670 data center projects under construction or planned across the United States and found 320 facilities classified as high-risk for tornadoes, large hail and damaging winds.
The study found that existing data centers in states more affected by SCS were worth nearly $20 billion, suggesting that future AI infrastructure in storm-affected areas could be worth nearly 40 times the value of existing facilities.
Overall, 56% of the 670 data centers planned for construction in the United States, representing an investment of nearly $800 billion, are located in states vulnerable to hurricanes, severe convective storms, earthquakes, or winter storms.
MS Amlin revealed that 27% of data centers (investing $440 billion) are planned in states with high risk of winter storms, which may disrupt power networks and create complex business interruption risks.
Meanwhile, 21% of planned data centers, representing $340 billion in investment, are located in states with high hurricane risk.
In addition, data centers in earthquake-high-risk states account for 3% of planned facilities, with investments of approximately US$12 billion.
Ms Amrin said the findings highlighted the scale of investment flowing into countries at risk of natural disasters as development of new mega-facilities shifts to southern regions where land and power are more favorable.
Martin Burke, chief underwriting officer at MS Amlin, said: “These figures highlight the opportunities and risks. Hundreds of billions of dollars in new digital infrastructure are being deployed in areas with higher risk of potentially damaging severe convective storms. When assets of this size are concentrated in disaster-prone areas, the potential loss severity of a single storm event can rise quickly. This is a growth opportunity for the specialty insurance market, but the risk must be properly managed and understood.”
He added: “As investment in AI accelerates, insurers must adopt more advanced approaches to managing aggregate risk. If the industry is slow to respond to this challenge, it could limit the deployment of capital and rollout of AI infrastructure.
“Our proprietary database of hundreds of U.S. data center projects allows us to capture risk not only from tightly clustered facilities, but also from supporting infrastructure such as power generation. This provides a more accurate overall risk profile.
“This visibility allows us to responsibly deploy capacity to support the industry’s growth while maintaining underwriting discipline. As this type of business continues to grow, the ability to monitor aggregate risk becomes increasingly important.”
