AI infrastructure investments to push data centre capex to over US$500bn by 2027 – report

News and Business

According to a recently published report from Dell’Oro Group, AI infrastructure spending will propel data centre capex to over a half trillion dollars by 2027. However, the company anticipates near-term cloud and enterprise capex growth to decelerate as the market undergoes digestion.

“Despite near-term data centre capex growth headwinds as the major cloud service providers and enterprises optimise their infrastructure, forthcoming technology transitions will stimulate long-term growth,” said Baron Fung, senior research director at Dell’Oro Group. “Most notably, the hyperscale cloud service providers will prioritise their investments toward accelerated systems for AI applications for both their public cloud platform and SaaS offerings. We will see continuous optimisation across the entire data centre stack, with the deployment of next-generation servers featuring high-core counts and deeper memory that are attached to next-generation networks. Meanwhile, the rest of the market will invest in accelerated systems more selectively, with most enterprises adopting a hybrid cloud strategy,” explained Fung.

The report also forecasts that worldwide data centre capex will grow 15% by 2027, and over 20% of the global server deployments in 2027 may be accelerated. However, Dell’Oro has trimmed its edge computing forecast, as it says the ecosystem and compelling use cases have been slow to materialise.

The forecasts provide a comprehensive overview of market and technology trends and include tables covering data centre and server capex and server unit shipments forecasts for Top 4 US Cloud, Top 4 China Cloud, Top 3 Tier 2 Cloud, Rest-of-Cloud, Telco, and Enterprise customer segments. The report also breaks out markets for data centre infrastructure equipment, along with server, storage system, and other data centre equipment revenues sub-segments.

For more information, visit www.delloro.com