The data centre industry is the infrastructural backbone of the digital age. Driven by the growth of the internet, the cloud, and streaming, demand for data centre capacity has grown precipitously. This trend has only accelerated suring the past two decades.
Now, the mass adoption of artificial intelligence (AI) is inflating demand for data centre infrastructure even further. Thanks to AI, consumers and businesses are expected to generate twice as much data over the next five years as all the data created in the last decade.
Data centre investment surges
Investment in new and ongoing data centre projects rose to more than $250 billion last year. This year, investment is expected to rise even further, and then again next year. In order to keep pace with the demand for AI infrastructure, data centre investment could soon exceed $1 trillion per year. According to data from Fierce Network, this could happen as soon as 2027.
AI’s biggest investors include Microsoft, Google, Apple, and Nvidia. All of them are pouring billions of dollars per year into AI and the infrastructure needed to support it.
Microsoft alone is reportedly in talks with Chat-GPT developer OpenAI to build one of the biggest data centre projects of all time. With an estimated price tag in excess of $100 billion, Project Stargate would see Microsoft and OpenAI collaborate on a massive, million-server strong data centre primarily using inhouse components.
It’s not just individual tech giants building megalithic data centres to support AI, however. Data from Arizton found that the hyperscale data centre market is witnessing a surge in investments too. These largely stem from companies specialising in cloud services and telecommunications. By 2028, Arizton projects that there will be more than $190 billion in investment opportunities in the global hyperscale data centre market. Over the next 6 years, an estimated 7118 MW of capacity will be added to the global supply.
Major real estate and asset management firms are responding to the growing demand. In the US, Blackstone has bought up several major data centre operators, including QTS in 2021.
Power struggles
Data centres are notoriously power hungry. As the demand for capacity grows, so too will the industry’s need for electricity. In the US alone, data centres are projected to consume 35 gigawatts (GW) by 2030. That’s more than double the industry’s 17 GW capacity in 2022 in under a decade, according to McKinsey.
“As the data centre industry grapples with power challenges and the urgent need for sustainable energy, strategic site selection becomes paramount in ensuring operational scalability and meeting environmental goals,” said Jonathan Kinsey, EMEA Lead and Global Chair, Data Centre Solutions, JLL. “In many cases, existing grid infrastructure will struggle to support the global shift to electrification and the expansion of critical digital infrastructure, making it increasingly important for real estate professionals and developers to work hand in hand with partners to secure adequate future power.”
- Data & AI
- Infrastructure & Cloud
