Global data centre revenue set to surpass $500 billion by 2027
Driven by AI and other technologies
The data centre industry is set to experience an extraordinary surge in revenue, with projections indicating that global revenue will exceed $500 billion by 2027. This forecast underscores the sector’s remarkable trajectory, driven by advancements in artificial intelligence (AI) and other technological developments.
According to Edith Reads, a financial analyst at Stocklytics.com, several key factors contribute to this upward trend, including the increasing adoption of multi-cloud solutions, network upgrades to support 5G technologies, and expansion initiatives by hyperscale data centre operators as primary drivers of revenue growth.
The rising demand from small and medium-sized enterprises (SMEs) for advanced data storage and processing capabilities further fuels the market’s expansion.
The data centre market will increase revenue over the next five years. From 2024 to 2029, global revenue is projected to rise by over $208 billion, marking a 50% increase.
$416 billion revenue in 2024
Data centres are anticipated to generate around $416 billion in revenue by the end of 2024, a 12% rise from the previous year., according to Reads. This growth trajectory will continue, with revenues reaching approximately $452 billion in 2025, surpassing $526 billion by the end of 2027, and reaching an astounding $624 billion by 2029.
This impressive revenue growth reflects the escalating demand for high-performance computing (HPC) and cloud network upgrades as businesses strive to enhance their server capabilities and improve data storage and processing efficiencies.
Currently, the United States leads the world in data centre facilities, with over 5,300 across the country. Germany follows with 521 data centres, the UK with 514, and China with 449, illustrating the sector’s significant expansion on a global scale.
Power consumption concern
However, the rapid growth of the data centre industry is not without its challenges. A significant concern is the escalating power consumption associated with the surge in AI technologies.
In the United States alone, data centres consumed 17 gigawatts of electricity in 2022, and this figure is projected to more than double to 35 gigawatts by 2030. This growing demand places immense pressure on power providers, who struggle to upgrade transmission networks to meet the increased electricity needs.
Consequently, data centre construction timelines are experiencing 24- to 72-month delays due to power supply issues, highlighting the urgent need for alternative, sustainable energy solutions.
To address these challenges, the industry is gradually adopting energy-efficient infrastructure models. Some data centre operators are exploring innovative approaches to reduce their carbon footprint and effectively manage power consumption.
For instance, Microsoft has integrated hydrogen power cells into its backup power systems for its cloud region in Sweden. At the same time, Samsung’s new data centre in Dongtan, South Korea, utilises external wind and cooler climates to minimise the need for traditional air conditioning.
This initiative aims to reduce greenhouse gas emissions by 21,443 tons by 2035, demonstrating a commitment to environmentally friendly practices.
Despite these efforts, the path to widespread adoption of renewable and cost-effective energy sources remains a work in progress. The data centre industry’s ability to overcome these power supply challenges will be crucial in sustaining its rapid growth and meeting the ever-increasing digital age demands.
In conclusion
In summary, the data centre industry is poised for exceptional revenue growth, with forecasts indicating a break past the $500 billion mark by 2027. This expansion is driven by technological advancements, particularly AI, and the growing need for sophisticated data storage and processing solutions.
However, the industry must navigate significant power consumption and infrastructure development challenges to maintain its upward trajectory and continue supporting the global digital ecosystem.
Featured image: The United States leads the world in data centre facilities, with over 5,300 nationwide. Credit: Christina Morillo
