Data centers, AI insights and ongoing trade uncertainty: Seven FM predictions for 2026

A new year may bring new optimism, but it also introduces new challenges for companies already contending with rapidly evolving risks.

At FM, it’s our job to anticipate risks others don’t so our clients can achieve what others can’t. With that in mind, we asked FM experts for their 2026 predictions, from artificial intelligence to extreme weather to trade tensions.

AI charges on

Artificial intelligence will continue its march to the future, often in the form of rapid data-center construction and a relentless quest for energy. In 2026, look for tech giants and energy providers to “chase every available electron” regardless of the generation method, predicts Lou Gritzo, Ph.D., FM chief science officer.

Persistent demand plus safe-harbor legislation will keep renewable energy projects viable. Also look for increased support for adding nuclear power in the form of small modular reactors.

FM is ready to champion resilience wherever AI infrastructure arises. Says Gritzo: “At FM, we will help our clients lead in resilient data center design, construction, power generation, operation, risk transfer and community welfare.”

The year leaders have been waiting for

Pentti Tofte, FM senior vice president, innovation, analytics and AI, offers another prediction: “2026 will be the year of enterprise resilience, especially for our clients.”

By enterprise resilience, FM means the holistic ability of a business to resist virtually any manner of disruption, including fire, equipment failure, flood, wind, hail, wildfire, freeze and snow collapse. By combining information on this array of risks, clients can prioritize their loss-prevention work by focusing on the risks with the greatest impact on their organization.

To obtain this data-driven risk management picture, FM has collected more than a billion data points through decades of FM engineering visits, rigorous scientific research and loss history. Data is also generated through testing at the FM Research Campus in West Glocester, Rhode Island, USA, analyzed by FM scientists, applied by FM engineers, supplemented by client experience and parsed by AI.

FM has aggregated country-by-country data on the resilience of the world’s business environments in the FM Resilience Index, which provides another vital tool amid the trade uncertainty that will extend into 2026.

“In 2026, business owners will for the first time have a range of powerful AI-based tools to easily identify their vulnerabilities and map their journey to resilience,” Tofte says. “Instead of relying on intuition to set priorities, companies will base their investments on science, engineering and real-world data. It’s the kind of business intelligence leaders have always yearned for.”

So. Many. Supply chain scenarios.

Trade uncertainty will persist in 2026 as businesses’ reactions to tariffs take effect. The winners will be those that aggressively plan for every eventuality—including the U.S. Supreme Court overturning the levies.

“In 2026, supply chain agility will be a huge competitive advantage in this volatile environment,” predicts Eric Jones, FM vice president, global manager, business risk consulting. “We’ll see leading companies prioritizing flexibility, creating new multisource supplier arrangements, selectively onshoring and gaming out the ripple effects of every conceivable scenario with every relevant party—including risk management.”

Combined with inflation, tariffs’ upward cost pressure has created another problem: Many companies have become underinsured. Some have stockpiled so much material that it outstrips their insurance limits; others’ assets have simply soared in value. Another factor is that companies are taking on new risks—for example, by switching to unfamiliar suppliers in geographies with hidden business risks.

Emerging economies improve their resilience

“In 2026, companies operating in dynamic emerging economies will aspire to meet higher standards of business resilience,” predicts Dr. Angelika Werner, FM’s research director of natural hazards and climate.

“As our Natural Hazard Report shows, business leaders are often less prepared for disruptive events than they’d like to be,” she explains. “FM will work this year to improve model quality related to flood hazards in countries like Brazil and India. We will investigate using technologies like drones, aircraft and satellite reconnaissance to better understand the localized impact on property risks. Today, these regions often lack the granularity of data related to terrain or rainfall that is readily available in the United States and Europe.”

Also in 2026, FM will continue to build out its AI-driven model landscape for climate risks. This will enable FM to build extreme-weather models that capture multi-hazard impacts and reflect trends in activity. FM clients are worried about the changing risk landscape of extreme weather, and this is a step toward getting “future ready” in our risk assessments.

Hidden risks proliferate

“In 2026, look for risk lurking in building and technology innovations,” predicts Stuart Keller, FM chief engineer.

As examples, he offers:

• Fully automated warehouses built for robots, not people. The robots’ lithium-ion batteries introduce new ignition sources, and densely packed warehouses are challenging for firefighters to enter.
• Cavity-wall construction containing combustible insulation in air gaps. When the insulation is ignited, the gaps act as flues that promote rapid fire growth while providing limited accessibility for firefighting.
• Mass-engineered timber, an attractive green construction material whose combustibility and vulnerability to moisture intrusion are key risk factors.
• Data hall risks like battery backup units, liquid cooling, high electrical power demands, massive scale and occasionally rushed construction timelines.
• Digital twin-based predictive maintenance that could inadvertently increase the risk of equipment breakdown.

“Most of these innovations have valid upsides such as cost-effectiveness, time savings or sustainability,” says Keller. “During the concept and design phases, key architectural and product design choices can increase one’s risk of serious business disruption. FM is committed to helping clients seize the benefits of innovation and mitigate the risks.”

Humans police AI thinking

“In 2026, thoughtful businesses will practice what I call the ‘conscious use of AI,’” predicts Laurel Rudnick, FM chief underwriting officer.

At FM, that means ensuring AI is generating valuable, detailed, actionable insights in context, both internally and for clients. Think of a prioritized property-specific list of loss-prevention measures that can help a client resist their most likely and severe disruptions. “Conscious use of AI can differentiate among a pool of disparate risks across multiple locations,” Rudnick says. “No more vanilla insights.”

The opposite of conscious use of AI is the reflexive use of AI. That means accepting generic information at face value. When massive amounts of data are aggregated and synthesized, the generated output often lacks nuance and is standardized according to the least common denominator.

“Our tools are designed and trained to understand the context of a field engineer or client question and pull forward the right research or guidelines to tee up a thoughtful human decision,” Rudnick says. “We're not looking for a single unsupported answer. We want data that produces an informed decision.”

Word of the year will be … ‘capacity’

“In 2026, look for an insurance capacity squeeze,” predicts Chris Dempsey, senior vice president of FM Intellium. Capacity, or an insurer’s ability to cover a loss, is second only to energy as a factor potentially restraining the data center buildout. “When a hyperscaler’s data center’s total asset value is worth, say, US$10 billion, it creates challenges for a single insurer to solely provide that level of capacity for a potential claim.”

FM is tackling the capacity challenge head-on through engineering-driven financial modeling and loss prevention, as well as strategic partnerships with investors, reinsurers, regulators, policymakers and technology companies across the industry.

FM recently announced a significant increase in capacity to support its global FM Intellium clients and the data and power generation ecosystem.

Also in 2026, look for data centers to focus not only on sheer computing power but on quality of service. Uninterrupted uptime is paramount for any tech giant positioning its AI as the smartest and most robust on the planet.

FM's approach to providing support from conceptual design and construction to operations for the digital ecosystem will help investors, developers and operators come together around design standards that account for risk of fire, extreme weather, power loss and other foreseeable risks.

Expect the unexpected

These are just a few of the developments FM’s experts predict in 2026. There’s one more: We predict there will be major surprises of some kind in the coming year. Whatever they are, FM will be there to help navigate them.