The global data center sector is poised for continued unprecedented expansion, with capacity expected to nearly double from 103 gigawatts to 200 gigawatts by 2030, according to a new outlook from JLL. That is being driven, of course, by artificial intelligence, which JLL says is rapidly reshaping the data center landscape. The real estate research firm forecasts that AI workloads will represent half of all data center capacity by 2030. It also says that "property metrics do not point to a bubble."
"Based on the actual real demand from real customers with real long-term,15-year contracts, we are not in an oversupply state today," he told Property Play.
Power has been working at the company for 25 years and said he is not concerned about too much construction in the sector.
Andy Power, CEO of Digital Realty, the second-largest data center REIT in the world, says just the opposite.
As hyperscalers like Nvidia , Amazon , Google and Meta announce more and more data center projects, cries of a bubble have been growing. Some say the sector is already overbuilding for a market that is still in its infancy with many unknowns ahead. There are also concerns that the financing for some of these projects is risky.
A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
CNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox.
In fact, JLL predicts that sector growth will need up to $3 trillion in total investment over the next five years, including $1.2 trillion in real estate asset value creation and approximately $870 billion in new debt financing. The report calls it an infrastructure supercycle.
"We're witnessing the most significant transformation in data center infrastructure since the original cloud migration," said Matt Landek, global division president for data centers and critical environments, at JLL. "The sheer scale of demand is extraordinary. Hyperscalers are allocating $1 trillion for data center spend between 2024 and 2026 alone, while supply constraints and four-year grid connection delays are creating a perfect storm that's fundamentally reshaping how we approach development, energy sourcing and market strategy."
JLL forecasts AI workloads could represent half of all data center capacity by 2030, compared with approximately 25% in 2025.
... continue reading