Global Data Center Market Projected to Near $500 Billion by 2029
Most data center experts expect to see continued investment over the coming years, but power remains a key concern.
November 27, 2024
The global data center market is projected to reach nearly $500 billion by 2029, driven by investment in AI, cloud computing, and digital infrastructure, according to new research from law firm DLA Piper.
In a survey of 176 senior executives on the topic of data center investment opportunities, most expressed confidence about the sector’s future, with 70% of respondents predicting increased investment in data centers in the next two years.
The global data center market is expected to be valued at around $300 billion in 2024, according to analysis by TMT Finance, which carried out the research for DLA Piper.
With a projected average compound annual growth rate of approximately 10% over the next five years, the market is expected to be valued at $483.15 billion by 2029.
Power Challenges
While almost all respondents said they expect AI to drive ongoing demand for data centers, those surveyed also expressed “significant concern” over the stability of power supplies for the rapidly growing number of data center facilities worldwide.
Ninety-eight percent of investors and operators told DLA Piper that they had concerns about the availability and reliability of power supplies when they made decisions about data center projects, with half of respondents identifying the issue as a principal barrier to investment.
The law firm said utility companies in the U.S. are being “flooded with power delivery requests for sites earmarked for data centers that they will not be able to satisfy until well into the 2030s.”
“In response, utility companies are now requiring large upfront non-refundable payments from investors in land and a committed off-taker of that power,” DLA Piper said. “The report also reveals utility companies are requiring developers to pay upfront for all the critical infrastructure, such as substations, needed to bring power to the site.”
‘Capacity Is Key’
Commenting on the research, Anthony Day, partner at DLA Piper, said: “Data center capacity is key to the AI revolution and the wider global economy. To satisfy increasing demands for processing power, not only will significant investment be required from across the industry, but also a clear framework established to encourage coordination between policymakers, investors, and power providers that ensures the heightened future power demands can be met.”
According to Andy Cvengros, managing director with JLL’s US Data Center Markets team, power is one of the biggest issues impacting the industry as we head into 2025.
Read more of the latest data center energy and power supply news