Editor’s note: Electronics recycling will be featured in sessions at the 2026 E-Scrap: The Longevity Conference in New Orleans October 26-28.
Industry analysts are seeing a direct correlation between data center construction projects and the future growth of ITAD. In a discussion with Resource Recycling, two analysts from FMI — a consulting and investment banking firm that has advised the built environment for decades — made the case that the sector may be closer to that inflection point than most operators realize.
FMI’s data suggests that US data center construction has grown from roughly $10 billion a year to $40 billion in 2025, a fourfold expansion in five years, with $100 billion projected by 2030 across more than 600 tracked projects, figures that cover construction only, not the technology and equipment inside. Consequently, the hardware flowing into decommissioning pipelines today is the hardware installed three to five years ago, meaning the construction boom ITAD executives are preparing for has, in its first installment, already been built. “If I was going to speculate on what the opportunity for ITAD was,” said Brian Strawberry, FMI’s chief economist, “I’d be more so looking at the past five years of data center build-out than the next five.”
The timing question is further complicated by AI’s impact on refresh cycles. Enterprise IT has operated on three-to-five-year replacement rhythms for decades, but that assumption no longer holds, as AI’s self-improving nature is compressing that cycle to as little as 18 months, rendering historical retirement models obsolete. Brett Robinson, who advises on ITAD and e-waste M&A transactions at FMI Capital Advisors, agreed.
“The volumes that ITAD players are seeing today are really still the data centers and end-user compute that was installed three to five years ago,” he said. “What’s happening now with the construction side is really just a leading indicator.”
On the question of hyperscaler control, Robinson sees a physical limit approaching. Hyperscalers self-perform as much of the decommissioning process as they can, driving service margins toward the floor. But when a hyperscaler clears floor space in a 400,000-square-foot facility, it doesn’t trickle the hardware out, it moves it in a compressed, multi-month sprint. You cannot push that through a 50,000-square-foot ITAD warehouse. “There’s going to be a lot of opportunity for ITAD players that can really be that release valve,” Robinson said. “There are just so many moving pieces in the build-out that they won’t be able to control it all themselves.”
Robinson estimates roughly 10 to 12 operators currently qualify as national-scale players capable of competing for hyperscale work, among them Iron Mountain’s ALM business, Sims Lifecycle, Sprout, Paladin, Quantum Lifecycle Partners, DMD and a few others. Against the “500-plus independents in the US market,” the gap is stark. Private equity has begun filling it, but Robinson cautioned that scale alone isn’t the answer. “M&A just for M&A’s sake can be dilutive to the story,” he said. “You’re not just slapping together five random ITAD players and hoping it works out.”
Geography is where FMI’s construction data becomes most directly actionable. For a decade, proximity to Northern Virginia was the dominant ITAD location logic. That is changing. Georgia, Texas, Arizona, Ohio and Indiana are becoming major nodes, driven by power availability rather than population. Phoenix alone is absorbing a planned $20 billion campus complex. According to a recent FMI report, authored by Robinson, titled “From Concrete to Silicon: What Data Center Construction Tells Us About the Future of ITAD“—shipping heavy liquid-cooled AI racks across the country is both inefficient and, in hyperscalers’ view, a security liability. An ITAD operator clustered around Northern Virginia is optimally positioned for the last decade, not the next one.
On the downstream side, foreign smelters and refiners are investing heavily in US capacity — Aurubis’s $800 million Georgia facility being the most visible example — as export pathways close. China’s restrictions, Southeast Asian bans, and Europe’s digital passport regime have collectively eliminated the arbitrage that once made offshore processing attractive. Urban mining is widely recognized as yielding higher concentrations of gold and other materials than conventional extraction. Robinson sees margins on the e-waste side as potentially stronger than on the IT services side, though he acknowledged the current commodity pricing environment is elevated and cyclical.
Strawberry closed with a reframe that cuts to the heart of it. “These are like mining companies in the US,” he said of ITAD operators. “Mining isn’t something you can do very easily. And that’s exactly what these companies are set up to do.” A long-term contract to process hardware from a hyperscale campus is, in that sense, a mining concession, a guaranteed feedstock stream with known composition.
