UII UPDATE 490 | MAY 2026
Intelligence Update

Modular data centers look to solve the challenges of AI

6 min read

Prefabricated modular (PFM) data centers trace their origins back to the build-out of mobile telecommunications networks of the 1980s and 1990s: factory-integrated technical facilities including all necessary equipment for cell towers to speed up on-site installation. The concept gained traction for data center facilities in the 2000s, pitched as a faster, more consistent method to deliver new capacity in all sizes — initially with tens and hundreds of kilowatts then later expanding to multiple megawatts.

Skidded and modularized electrical systems have become particularly popular with some large colocation operators and cloud service providers. However, end-to-end PFM construction of data centers (including the IT space) has not become mainstream despite mature practices and several examples of successful projects.

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