AI infrastructure spending will maintain its strong growth momentum despite ongoing sustainability efforts.
“We project that data center infrastructure spending could surpass $1 trillion annually within five years,” says Dell’Oro ‘s Baron Fung, “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. 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 centers. Key areas of focus include advancements in accelerated computing through GPUs and custom accelerators, LLM optimizations, and next-generation rack-scale and network infrastructure—all crucial to enabling sustainable growth from both a cost and power perspective.”
Datacentre capex is forecast for a CAGR of 21 percent for until 2029.
Accelerated servers for AI training and domain-specific workloads could represent nearly half of data center infrastructure spending by 2029.
While the Top 4 US-based cloud service providers – Amazon, Google, Meta, and Microsoft—will account for nearly half of global data center capex in 2025, select Tier 2 cloud SPs are poised to increase capex significantly over the next several years.
