A new report finds that investment in the worldwide data center market reached $61bn this year, setting a new record atop the wave of the artificial intelligence boom.
The analysis by S&P Global, first reported by CNBC, documented what the market intelligence firm called a “global construction frenzy that shows no signs of slowing”, to build out the massive real estate, hardware, and energy requirements driven by insatiable demand from AI companies. S&P pegged 2024’s investment in the data center market at $60.8bn, just below the 2025 number.
“Unable to buy, many investors are turning to new builds,” wrote Iuri Struta, an analyst for S&P Global.
There are approximately 500 data centers in the United Kingdom, compared with about 4,000 in the United States, according to Data Center Map, which tracks the facilities globally.
Struta, the S&P Global analyst, said he does not see the demand for data centers slowing.
“The global data center footprint is projected to expand at a faster rate over the next five years than it did in the previous five, spurred by demand for energy- and computer-intensive AI workloads,” said Struta.
S&P Global’s report comes at a time when some investors worry that the entire artificial intelligence sector may be in the midst of huge overspending for unproven ongoing returns.
Last week, Oracle’s shares dropped 11% after it reported lower quarterly earnings than analysts had expected, which in turn dragged the stock prices on some other major companies in AI. Some companies such as Oracle, along with Nvidia and OpenAI, have been criticized recently for making deals with one another that seem circular to many investors.
Earlier this year, the International Energy Agency noted in a lengthy report that, globally, “electricity demand for data centres more than doubles by 2030”, reaching 945 terawatt hours (TWh), or just more than “Japan’s total electricity consumption today”.
This month, a trio of analysts from Deutsche Bank put out a staggering chart indicating that OpenAI alone will burn through $143bn between 2024 and 2029, the year before the company claims it will turn a profit. That chart shows how much more the ChatGPT maker, seen as a bellwether of the AI industry, plans to spend relative to other tech giants of the last two decades, including Amazon, Tesla and Uber, reached profitability.
“Of course, OpenAI may continue to attract significant funding and could ultimately develop products that generate substantial profits and revolutionise the world,” Jim Reid, managing director, global head of macro research and thematic strategy at Deutsche Bank, wrote.
“But at present, no startup in history has operated with losses on anything approaching this scale. We are firmly in uncharted territory.”
