KVIG Informative

Fleet Data Centers is pressing ahead with a massive project east of Reno even though the company hasn’t nailed down what it will actually cost to build. A credit rating agency says that’s worth watching.

Denver-based Fleet Data Centers is proceeding with a $5.2 billion data center project east of Reno without a final agreement locking in construction costs, according to S&P Global Ratings.

S&P specifically flagged the unresolved construction cost agreement as a factor worth monitoring in its assessment of the project’s financial risk, a notable caveat given the scale of the planned investment.

The project adds to a wave of large-scale data center investment in Northern Nevada, where multiple operators have pursued major builds in recent years, drawing on the region’s available land and relatively low energy costs compared to neighboring states.

Without a locked construction price, a project of this scale carries exposure to rising material, labor and equipment costs that could significantly increase the final price tag before the facility is completed, a risk that applies broadly across the data center construction industry amid high nationwide demand for the same specialized equipment and skilled labor.

The AI data center construction boom has driven sharply increased demand nationally for the same pool of contractors, electrical equipment and cooling systems multiple large projects are competing for simultaneously, a dynamic that can drive up costs for any project still finalizing its construction agreements.

Nevada’s reputation as a comparatively low-cost, business-friendly location for data center development has helped attract projects like Fleet’s, even as questions about long-term infrastructure costs, water use and construction financing remain unresolved for many of the state’s largest proposed builds.

A $5.2 billion project without a locked construction price is a bet that costs won’t rise faster than the company can absorb before the facility opens. Fleet is making that bet anyway. Whether it pays off is a question Nevada won’t get an answer to until the building is actually finished — and the final invoice comes due.