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Meeting the silent demand: Retrofitting edge data centers to power the AI era

Learn more about the urgent need to retrofit thousands of existing data centers to meet the surging demands of high-performance computing (HPC) and artificial intelligence (AI).

04/20/2026 · 5 minute read

In today’s rapidly evolving digital infrastructure landscape, attention has been focused on the construction of new hyperscale data centers. These billion-dollar campuses often dominate headlines, but there is also an urgent need to retrofit thousands of existing data centers to meet the surging demands of high-performance computing (HPC) and artificial intelligence (AI).

This “silent demand” is reshaping the data center ecosystem. Globally, there are approximately 12,000 data centers — many of which are smaller facilities located at the edge of urban centers or suburban areas. Many of these facilities should be modernized to effectively transition from traditional data storage and processing roles to supporting AI-driven workloads, which require significantly more power, advanced equipment, and sophisticated engineering solutions.

Tackling a complex undertaking

Edge data centers are essential to the operations of the future. But retrofitting existing assets is not simply a technical upgrade; it is a complex and multifaceted endeavor that demands a comprehensive understanding of interrelated challenges that can affect timelines, costs, and operational continuity. Key challenges include:

Many existing data centers, especially those at the edge, need to substantially increase their power and cooling capacity to support HPC workloads, which generate more heat and consume more energy to cool. But this can create a bottleneck, especially where urban power grids and energy infrastructure are already stretched thin. Securing additional power often involves complex negotiations with energy providers and may require innovative solutions, such as localized power generation close to end users.

Upgrading data centers to support HPC and AI workloads is increasing demand for hardware and components. With global supply chains already under strain, securing these needed parts could be challenging. Without careful procurement and scheduling, delays could lead to operational outages, with significant repercussions. 

Retrofitting projects require skilled tradespeople — including licensed electricians, plumbers, and mechanical contractors — who are increasingly mission-critical to data center operations. But there is already a shortage of these specialized skills, which could delay projects. In the US alone, more than 80,000 job openings for electricians are projected annually through 2034.

Retrofitting active data centers can introduce operational risks, including potential business interruptions that could affect tenants. Construction or equipment upgrades may inadvertently disrupt critical services, potentially leading to costly penalties and reputational damage. Rigorous risk management, contractor oversight, and contingency planning are essential to minimize downtime and maintain service continuity.

Strategic considerations for successful retrofitting processes

Given these challenges, data center owners/operators may want to adopt a comprehensive and strategic approach that addresses technical, operational, and financial complexities. Key considerations include:

Operators should plan carefully to overcome the possible limitations of constrained urban power grids. Securing additional power may involve negotiating complex power contracts and exploring innovative, localized power-generation solutions in an effort to find reliable, scalable power and cooling infrastructure that meets increasing demands.

Early and precise procurement strategies can be critical to secure necessary equipment and avoid costly delays. Given the scale and complexity of retrofitting projects, detailed scheduling and project management may be vital to minimize disruptions.

Construction and upgrades carry risks of accidents or errors that could disrupt critical services. Mitigating these risks often calls for rigorous oversight of contractors to help confirm that they adhere to strict safety and operational protocols. It is also important to develop robust contingency plans intended to protect against business interruptions.

The shortage of qualified labor with specialized skills may increase demand for targeted training as well as workforce development and reskilling initiatives. Preparing the workforce for the evolving demands of data center operations can be essential for timely and successful retrofits.

Given the scale and complexity of retrofitting, insurance programs may be carefully tailored to reflect the contractual commitments and operational risks involved. Coverage should address builders’ risk, supply chain disruptions, contractor liabilities, and business interruption in an effort to protect revenue streams and provide better financial resilience. It is also prudent to review contractors’ insurance programs to determine whether these might provide sufficient coverage in the case of disruptions.

Thriving in a competitive environment

Edge data centers face increasing competition not only from each other but also from hyperscale providers. The silent demand to retrofit existing data centers to address the insatiable demand for scalable computing power requires a nuanced understanding of the interconnected risks and a strategic, holistic approach to address these evolving challenges. Successfully navigating this complex landscape can position organizations to better meet the demands of the digital economy with the goal of safeguarding operational continuity and financial performance through more powerful data centers at the edge.

Learn more

Marsh Risk’s team of digital infrastructure specialists has the knowledge and experience to help you navigate the complex digital infrastructure ecosystem, intended to help you to better protect your capital and accelerate growth.

For more information, film out the form to speak with a Marsh Risk representative. 

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