Research Briefing | Jun 25, 2024

The rapid rise of data centre construction is only getting started

Over the last three decades, new data centre construction has surged and there are no signs that growth will abate in coming years as data collection, analysis, and storage needs are set to grow.

What you will learn:

  • A huge driver of this growth is AI, which requires significantly more power than traditional data centre workloads. If, as we expect, AI becomes more integrated in industries’ production, new data centres will need to come online to ensure optimal design and sufficient power capacity.
  • Power will be a key limiting factor to growth as global commitments to reduce reliance on fossil fuel means data centres will increasingly be competing for grid access. Continued innovation in hardware cooling, which accounts for 40% of data centres’ electricity demand, is vital as AI and computationally intensive workloads proliferate.
  • The US and China are home to the most data centres, but we expect growth to be skewed towards developing Asia as the region has a growing tech sector and supportive government policy aimed at developing its telecommunication infrastructure and attracting investment from leading data centre firms. India, Malaysia, and Indonesia are specific stand-outs.
  • Using data from our US Tech Spend Monitor, we find that sectors in the US that stand to benefit most, because of their high usage of such services, include the information, professional & business services, and finance, insurance & real estate sectors.
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