New Delhi, Feb. 07, 2025 (GLOBE NEWSWIRE) -- As detailed in the latest research from Astute Analytica, the global data center market was valued at US$ 352.93 billion in 2024 and is projected to hit the market valuation of US$ 876.80 billion by 2033 at a CAGR of 10.64% during the forecast period 2025–2033.
The rapid transition toward digital transformation across various industries is significantly fueling the demand for data centers. According to projections from analyst firm Dell’Oro Group, global annual capital expenditure (capex) for data centers is expected to exceed $1 trillion by 2029. This remarkable growth is underscored by a projected compound annual growth rate (CAGR) of 21 percent within the sector during this period.
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A noteworthy trend is the anticipated surge in spending on accelerated servers designed for AI training and domain-specific workloads, which could account for nearly half of all data center infrastructure expenditures by 2029. This shift reflects the increasing reliance on data-intensive processing capabilities required to support advanced technologies like artificial intelligence.
In Latin America, demand for data centers is on the rise, with net absorption reaching 73.3 MW in the first quarter of 2024. This growth is particularly driven by hyperscale companies that are expanding their presence in the region.
The expansion is indicative of the broader trend where major players in the tech industry recognize the strategic importance of establishing a strong foothold in emerging markets, ensuring they can effectively support their growing customer bases. Furthermore, the data center sector is increasingly incorporating automation and artificial intelligence (AI) technologies to enhance their operations.
Rising Adoption of AI: Expanding the Demand for Data Centers
The surging demand for AI-ready data centers presents a wealth of opportunities for companies and investors throughout the entire value chain. Central to the AI revolution is the rapid evolution of semiconductor technology, which has seen remarkable advancements in recent years. Over the past two years, Graphics Processing Units (GPUs) have significantly increased in power, resulting in higher rack densities that now range from 40 kW to 130 kW per rack. Looking ahead, projections suggest that future chips could achieve an astonishing 250 kW per rack, further enhancing the capacity of data centers to handle demanding workloads.
As new data centers are being constructed, they are increasingly designed to accommodate both AI and traditional workloads. While AI is a major growth driver in the industry, even the most optimistic adoption scenarios indicate that AI will account for less than 50% of total data center demand by 2030. Instead, traditional workloads, which typically involve lower-intensity tasks such as data storage and cloud-based applications, will continue to dominate the landscape. This highlights the need for a balanced approach in data center design to ensure they can efficiently manage a diverse range of workloads.
In recent years, data center operators have increasingly turned to AI technologies to enhance the efficiency of their daily operations. A recent survey revealed that 57 percent of data center owners expressed confidence in allowing an AI model to make operational decisions—a notable increase of nearly 20 percent compared to the previous year. This growing trust in AI underscores the technology's potential to optimize processes, reduce costs, and improve overall service reliability in the data center industry. As the sector continues to evolve, the integration of AI into operations is likely to become even more prevalent, shaping the future of data center management.
Hyperscale Data Centers are Gaining Attention Among End-Users
The hyperscale segment of the data center market remains a dominant force, accounting for a substantial revenue share of 35.14% in 2023. This segment is primarily driven by major cloud service providers (CSPs) such as Amazon, Microsoft, Google, Meta, Apple, Alibaba, and Tencent. These hyperscale data centers play a pivotal role in the expansion and support of global cloud platforms, facilitating the vast amounts of data processing and storage required in today's digital landscape.
As Astute Analytica looks toward the future, it is projected that by 2030, approximately 60 to 65 percent of artificial intelligence workloads in Europe and the United States will be hosted on infrastructures provided by these cloud service providers and other hyperscalers. Notably, around 60% of this capacity is supplied by hyperscale cloud providers and third-party wholesale data center operators, who typically cater to a limited number of large enterprise clients.
Technological advancements, coupled with strategic geographical positioning, have led to the emergence of key cities such as Mumbai, Singapore, Amsterdam, and Dublin as leading hubs for hyperscale activity within the data center market. These cities, often referred to as the "four tech cities," are expected to experience significant growth in hyperscale data center development.
The favorable conditions in these regions, including robust infrastructure, favorable regulatory environments, and access to a skilled workforce, have made them attractive locations for hyperscale operations. As demand for data processing and storage continues to surge, these cities are poised to host a boom in hyperscale data centers, further solidifying their importance in the global data center ecosystem.
Global Data Center Market Major Players
- Amazon Inc.
- Dell Technologies
- Digital Realty
- Equinix, Inc.
- Google LLC
- Hewlett Packard Enterprise Development LP
- IBM Corporation
- Microsoft Corporation
- N+ONE Data Centers
- NTT DATA, Inc.
- Oracle Corporation
- SAP SE
- Other Prominent Players
Market Segmentation
By Component
- Solution
- Services
By Type
- Co-location
- Hyperscale
- Edge
- Other
By Enterprise Size
- Small and Medium-Sized Enterprises (SMEs)
- Large Enterprises
By Industry
- Banking, Financial Services & Insurance (BFSI)
- Information and Communication Technology
- Government Agencies
- Energy & Utilities
- Healthcare
- Other
By Region
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- South America
For more information about this report visit: https://www.astuteanalytica.com/industry-report/data-center-market
About Astute Analytica
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