The new (and old) players overtaking hyperscalers in the data center race

In 2021, only a handful of companies filed permits for new data centers. Just 100 developers covered 96% of all new permit filings — essentially the entire market. Among those, just 20 developers accounted for more than half of new projects.

In 2024, that started rapidly changing. Riding the AI wave, new developers began filing permits in rapid numbers. Some of them were brand-new companies, born from the compute boom. Others were traditional real estate titans, shifting focus from commercial and residential development.

So far this year, according to Spark’s database, those top 20 developers, who had accounted for more than 50% of new permits just a few years ago, now own only 35% of the market. Even more starkly, 38% of new filings come from developers outside the top 100 — compared to only 4% just five years ago.

The data center gold rush is in full swing, and everybody wants a share. But who are these new companies?

Hyperscalers are building more, but still getting outpaced

In 2022, Spark tracked 17 permits filed by Amazon for data centers. Microsoft followed close behind with 16. These numbers put them as the two most active developers by a large margin.

Now in 2026, those look like rookie numbers. Amazon has filed more than 50 permits in the first eight months of the year, and probably more through shell companies (more on that later). Microsoft has grown as well, but slower, from 16 to only 24 permits, allowing Google to surpass them for the silver medal.

Overall, so far this year, the top hyperscalers have already filed for 144 permits — 6x the number those same companies filed in 2021. And the year isn’t even over yet; by the end of the year, they’ll have filed an estimated 264 permits, 11x their pace just 5 years ago.

Hyperscalers are racing to build more, but their share is still falling. That’s because even a 11x increase isn’t enough to keep pace with the others in the market.

Neo-cloud providers hit the scene

Before the AI boom, the big trend in Silicon Valley was cloud computing. Companies were shifting workloads to the cloud to scale more easily, to save costs from overprovisioning, and to strengthen their security. The big question in tech was, “How quickly can you move to the cloud?”

But traditional cloud providers can struggle with AI. Their architecture is built to be general-purpose and run on CPUs. That’s useful for a data warehouse, but it’s a barrier for training and inference.

That gap is where neo-cloud providers target. They build GPU-first data centers that can easily communicate between internal devices, perfect for AI models, and they cut down latency at all costs.

Neo-cloud providers specialize in data centers, and as the market has grown, they’ve been increasing their footprint. But as a proportion of the market, they’ve stayed roughly the same over the past 5 years, composing 5% to 8% of permits filed. Like hyperscalers, they’re growing because the pie is growing, not because they’re increasing their slice.

The real shift in real estate

But the major story of new growth is happening in an old industry: Real estate.

A few years ago, real estate companies largely did not think about data centers. Lumping them into “industrial” development alongside factories and warehouses, real estate firms saw them as an expensive, niche product.

They’ve rapidly realized their mistake.

In 2021, real estate companies across the US filed only 28 permits total for new data centers. So far this year, they’ve filed over 320 and will probably land around 594 permits by the end of the year — a more than 21-fold increase, twice that of hyperscalers and neo-cloud providers.

Shell companies are a small and stable share

As data center construction grows, one of the concerns brought up by many residents is transparency. Shell companies, the narrative goes, are being used by developers to hide their projects until the last moment. One example was “Liames, LLC”, which began buying Ohio land in 2023 for what was eventually revealed to be a Meta data center. A common giveaway is the name of the company, often either an address (6409 wuliger way LLC) or project-specific (MCD 7 LLC).

These examples create fear that developers are using increasingly shady practices. But in reality, shell companies (or SPVs, Special Purpose Vehicles) haven’t grown in usage over the past few years. Since 2021, SPVs have been responsible for between 3% and 9% of new permit filings.

It appears that hyperscalers only build data centers themselves when they need to, whether through themselves or an LLC. But when real estate developers can do it instead, the tech giants are more than happy to let them.

What this means

We opened discussing the increasing atomization of data center development. Where 100 companies used to develop 96% of new projects, now they only cover 62%. More companies than ever are building data centers.

But only some are growing fast. Real estate companies, with detailed Rolodexes and defined operations, have proven able to file permits more reliably than newer entrants. Hyperscalers have increasingly outsourced their construction to companies like Trammell Crow. And the neo-cloud companies, while growing, haven’t been able to outcompete them.

Real estate firms have a few variables on lock that allow them to win. They know local authorities well across the country. They have established rezoning processes and competitive intelligence. And they have playbooks of what works and what doesn’t.

For a data center developer to compete, they need to do the same. That’s where Spark comes in, and why it’s trusted by leading developers like NextEra and Intersect Power. Reach out today to see how to ensure your next project remains viable — no matter what happens.