First Street Study: 80% of Data Centers Are Vulnerable to Floods, Wildfires and Hurricanes

Nearly 80% of the world's data centers are located in zones facing extreme climate threats: floods, hurricanes and wildfires. That is the conclusion of First Street, a company that specializes in climate risk analysis.

Scale of the vulnerability

First Street's analysts assessed digital infrastructure sites worldwide and found a worrying picture: the vast majority of data centers sit in areas already threatened by extreme natural events. Each region carries its own risks:

• Floods are a concern for facilities in coastal lowlands, river floodplains and urban areas with overloaded storm drainage systems
• Extreme winds and hurricanes threaten data centers in the Atlantic and Pacific hurricane belts, as well as in the monsoon zones of Asia
• Forest and grassland fires are critical for facilities in the western US, southern Europe and Australia

For operators, climate incidents translate into concrete losses: unplanned downtime, damage to server hardware, expensive repairs and sharp increases in insurance premiums. Corporate customers who rent capacity from cloud providers risk losing access to critical services and facing penalties for breaching their own commitments to users.

The AI infrastructure paradox

There is a bitter irony here. The data centers that power artificial intelligence systems are among the largest electricity consumers in the world. The AI boom of recent years has sharply accelerated the construction of new facilities and increased their total consumption, and with it their greenhouse gas emissions.

Those same emissions are accelerating the climate crisis: they make downpours more intense, hurricanes more powerful and wildfire seasons longer. As a result, AI infrastructure is caught in a feedback loop: it harms the climate through its own emissions, and it becomes an increasingly vulnerable victim of climate disasters.

For the industry, this is not an abstract threat. Natural disasters have repeatedly hit major digital infrastructure sites already, from typhoons in the Asia-Pacific region to hurricanes on the US East Coast and devastating wildfires in California.

Financial and operational consequences

The climate vulnerability of data centers translates directly into financial losses. Downtime is extremely costly for operators: even a few hours of outage at a large facility means losses in the millions, both directly and through penalties owed to corporate customers whose services depend on stable infrastructure.

Insurers are already revising their approach. Rates for facilities in high-risk zones are rising faster than the market, and some underwriters are refusing to insure data centers in the most dangerous locations altogether, particularly those in river floodplains or fire-prone forest areas.

Adaptation measures require serious capital investment: reinforcing building structures, independent backup power systems, and building redundant capacity in geographically distributed regions. All of these costs are ultimately built into the price of cloud services and are gradually felt by corporate customers.

What this means

The AI boom has created enormous demand for data centers, often in regions where land is cheaper and permits are easier to get, but climate risks are higher. The industry now has to rethink how it sites new facilities and urgently improve the resilience of those already operating.

For cloud providers and their customers, the question of infrastructure reliability in a changing climate has moved from theoretical to operational, starting today.