Research by DLA Piper suggests global data centers remain hopeful for AI-driven growth, despite energy supply concerns. According to the study, 70% of data center investors and operators predict increased investment in the next two years. This optimism is fueled by innovation in AI applications, including machine learning and natural language processing.
Despite this enthusiasm, energy supply remains a crucial challenge. The study highlights that 98% of respondents are worried about power supply reliability. For half of these respondents, power stability is a significant deterrent to further investment. The global data center market is expected to grow at a 10% compound annual rate over the next five years. This growth will increase its valuation from USD 300 billion in 2024 to USD 483.15 billion by 2029, as analyzed by TMT Finance for DLA Piper.
The Asia-Pacific region is seeing substantial data center developments by front-runners like Japan, South Korea, Australia, and Singapore. These countries are spearheading larger projects, while Southeast Asia experiences unique growth dynamics. Concurrently, there’s an increasing emphasis on sustainability, as energy and water use in data centers attract more scrutiny.
Susheela Rivers, Head of Real Estate, Asia Pacific, at DLA Piper remarks, “We have seen a shift toward building data centers in less traditional locations due to power constraints in major cities. Investors are interested in ‘powered shell’ developments, offering infrastructure without IT hardware, providing flexibility and scalability. Despite the challenges, Asia’s data center industry is at a pivotal moment, with increasing investments in cutting-edge technologies and a strong focus on ESG practices.”
Meanwhile, Lauren Hurcombe, Hong Kong-based IPT Partner at DLA Piper, adds, “The report underscores the critical role AI is playing in reshaping the data center landscape. In Asia, we are witnessing a surge in demand for data centers capable of supporting AI-driven applications, driving investment and innovation in the region. Opinions on future data center locations vary, with AI’s reduced sensitivity to latency allowing for flexible site selection.”
The survey, conducted by TMT Finance, included 176 senior executives from various data center investment sectors. Key issues discussed were investment opportunities, power access, and AI’s impact. The findings reveal that 81.66% of participants find power supply issues “very prevalent” and an additional 16.57% consider it “prevalent” in decision-making for data center projects.
Globally, 51% of respondents focus primarily on Europe, 33% on North America, 23% on the Asia-Pacific region, 15% the Middle East and Africa, and 11% concentrate on South America. This geographical diversity offers insight into the shifting trends and priorities across the global data center landscape.
