AI-fuelled data centre spend to hit USD $1 trillion by 2030
Annual spending on data centre IT and facility equipment is set to reach USD $1 trillion by 2030, driven by capital investments in artificial intelligence, according to new market analysis. In 2024, spending hit USD $290 billion, largely propelled by major technology companies investing heavily in infrastructure.
Hyperscaler influence
Cloud operators including Alphabet, Microsoft, Amazon and Meta accounted for nearly USD $200 billion in capital expenditure in 2024, according to IoT Analytics. Forecasts indicate a further 40% spending increase during 2025. The majority of investment is being dedicated to IT infrastructure, representing 78% of all spend. Of this, servers alone made up 61% of the total. Facility elements such as electrical and cooling systems comprised 12% of 2024 spending.
Technology shifts
The surge in investment is driving significant changes across data centre design and operations. Key technology developments include alterations to server architecture optimised for AI workloads, the roll-out of new storage methods such as Heat-Assisted Magnetic Recording (HAMR), and the implementation of AI-ready electrical systems. Liquid cooling, once rare, is becoming standard practice to support increased rack densities and power requirements.
Market competition
IoT Analytics' research points to a fragmented competitive landscape. Excluding NVIDIA's dominance in chips, no company holds more than a 20% share of the data centre infrastructure market. Seven core segments-spanning both IT and facility infrastructure-are predicted to see sustained double-digit growth through the end of the decade, fuelled by ongoing capital investment among cloud service providers and enterprises.
"We are on track for $1 trillion in data center equipment spending on servers, power systems, cooling, and other infrastructure components. This surge in CapEx, driven by AI, represents a tremendous opportunity for hundreds of vendors supplying different components of the data center stack. Innovation across every segment is intense, creating room for major market share shifts. Apart from NVIDIA's chip dominance, no single player holds more than a 20% share in the overall data center infrastructure market, making this one of the most competitive technology battlegrounds of the coming years," said Knud Lasse Lueth, CEO, IoT Analytics.
Segment growth
Seven main segments are identified as the principal recipients of increased spending, with each expected to achieve double-digit annual growth rates. The report highlights a cycle of competitive pressure and opportunity for vendors across areas such as server hardware, power supply infrastructure, storage, and cooling systems. The accelerated adoption of AI technologies is cited as the main catalyst for this growth.
Data centre operators are under increasing pressure to upgrade and adapt both IT and facility systems to meet performance and efficiency demands generated by new AI workloads.
