Artificial Intelligence (AI) technology has seen unprecedented growth since the launch of ChatGPT, transforming both industries and everyday life. With indications of not only coexisting with humans but enhancing productivity, AI's influence has made waves across the globe.
According to Precedence Research, the global data center industry is projected to reach $364.6 billion USD by 2034, driven by the increasing demand for AI capabilities. This surge has resulted from tech giants like Amazon Web Services, Google Cloud, and Microsoft Azure ramping up their investments to meet the mounting need for computational power required for advanced AI applications. Key reports indicate the data center market is poised to grow at a compound annual growth rate (CAGR) of 11.4% over the next decade.
With the growing pressures for cloud service providers to accommodate powerful AI models such as OpenAI's ChatGPT and Google's Gemini, many countries—particularly the United States, China, and those within the European Union—are witnessing rapid responses. The demand for cutting-edge data centers capable of supporting AI workloads has doubled since 2022 as companies strive to maintain competitive advantages.
A notable forecast from the International Energy Agency reveals by 2030, data centers equipped to handle sophisticated AI applications will account for 70% of overall demand, with generative AI alone contributing approximately 40%. This shift requires operational changes as traditional data centers, which typically utilize 5 to 10 megawatts (MWs) of power, evolve to hyperscale variants requiring as much as 100 MWs.
Over the past two years, significant deals have emerged as organizations race to build AI-ready infrastructures. For example, Blackstone and Digital Realty have agreed to invest $7 billion to create data centers across key locations such as northern Virginia, Paris, and Frankfurt. Meanwhile, U.S.-based Super Micro Computer aims to expand both domestically and across Asian markets to meet demand.
Specific large-scale projects underline the massive scale of data center expansion. The Red Oak Data Center Campus in Texas is working toward completion by Q4 2027 with planned capacity of 480 MW, and the 1,000-MW Evanston Hyperscale Data Center located in Wyoming aims to be online by Q4 2026. Meanwhile, China is significantly stepping up investment as well, with the country projected to grow its data center market to $33.4 billion USD by 2030.
Under its “Eastern Data, Western Computing” initiative, China’s plans include high-quality and sustainable data centers, integrating foreign investors—like Microsoft and AWS—into its network. The country facilitates foreign participation, enabling firms such as Tesla to access local cloud computing services, which showcases the integration of data centers and international business interests.
Innovation isn't limited to merely constructing new centers. China is leading the development of the first commercial underwater data center. This facility promises to save on energy usage by using cold seawater for natural cooling—demonstration of efficiency meeting technological advancement.
Despite these strides, challenges remain. The data center industry grapples with excessive energy consumption and cybersecurity threats potentially impacting investments. Renewable energy's inconsistent nature also poses risks, emphasizing the need for solutions balancing efficiency with sustainability.
Looking forward, experts believe the strong global investment focus will continue to shape the data center industry dynamically. The outlook remains optimistic as AI's capability to drive growth and transform industries resonates worldwide. Dmytro Konovalov emphasizes the upbeat future of data center construction aligned with the demands of artificial intelligence.
Indeed, as organizations race to leverage AI, the rising need for advanced data centers could herald the next technological revolution. The successful blending of AI capabilities and strategic infrastructure development might redefine not only how companies operate but also how societies will interface with technology moving forward.
