Global data centre capex to reach $1tn by 2029 amid AI surge

February 06, 2025 02:40 PM

A bill pile of cash superimposed in front of a data centre server room

Global data centre capital expenditure will surpass $1 trillion according to new projections from Dell'Oro Group.

Figures from Dell'Oro’s new Data Centre IT Capex 5-Year Forecast Report suggest that global data centre investments will grow by a compound annual growth rate (CAGR) of 21%, with AI training and domain-specific workloads set to represent almost half of data centre infrastructure spending by 2029.

Subscribe today for free

The connectivity news and insights that matter - straight to your inbox

Baron Fung, senior research director at Dell'Oro Group, said: “While AI spending has yet to meet desired returns and efficiency improvements, long-term growth remains assured, driven by hyperscalers' multi-year capex cycles and government initiatives such as the $500 billion Stargate project.”

The report notes that AWS, Google, Meta, and Microsoft will account for nearly half of global data centre capex in 2025, with Microsoft alone planning to spend $80 billion building AI-enabled data centres this year.

While the quartet are set to dominate data centre spending, the report suggests that select Tier 2 cloud service providers are poised to significantly increase capex on data centres over the next several years.

For example, Oracle has joined the Stargate project with OpenAI, SoftBank, and Microsoft to expand AI infrastructure in the US, while Vultr is building an AI supercomputer cloud cluster with help from Juniper Networks, AMD, and Broadcom.

Fung added: “Although recent advancements in AI model training efficiency from DeepSeek have been disruptive, innovations have been in progress for some time to drive greater efficiencies and lower the total cost of ownership in building and operating AI data centres.

“Key focus areas of focus include advancements in accelerated computing through GPUs and custom accelerators, large language model optimisations, and next-generation rack-scale and network infrastructure — all crucial to enabling sustainable growth from both a cost and power perspective.”