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    Home » AI drives unprecedented surge in data centre spending
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    Data-Centre-Capital-Expenditures
    AI

    AI drives unprecedented surge in data centre spending

    By Joyce DongMarch 21, 2025No Comments3 Mins Read
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    • AI investments drive a massive surge in data centre capital expenditures.
    • Hyperscale cloud providers dominate spending, with NVIDIA leading the market.

    What happened: Surge in data centre capex fueled by AI investments

    Global data centre capital expenditures (capex) reached an unprecedented $455 billion in 2024, marking an extraordinary 51% increase compared to the previous year, as highlighted in a new report from Dell’Oro Group. The spike is mainly attributed to an increase in investments in AI training infrastructure, which saw an eye-watering 161% growth. Hyperscale cloud providers, including major players such as Google, Amazon, and Microsoft, accounted for more than half of the overall data centre capex. This growth reflects the increasing demand for robust infrastructure to support AI workloads and machine learning.

    The primary driver of this spending surge was the deployment of optimised servers for AI training workloads. Baron Fung, senior research director at Dell’Oro Group, explained that hyperscalers were the main force behind this accelerated investment. Among the key players, NVIDIA‘s Hopper architecture dominated the market for much of the year, with significant growth propelled by the adoption of Blackwell systems later on. Custom AI accelerators from these cloud giants further contributed to the expansion of AI infrastructure.

    In addition to hyperscalers, companies like Elon Musk’s xAI and CoreWeave, both tier 2 cloud providers, also saw impressive growth in capex. These companies rapidly expanded their GPU deployments, approaching the spending levels of hyperscalers as they sought to meet the growing demand for AI capabilities. This trend is expected to continue, with a forecasted 30% growth in data centre capex in 2025.

    Also read: AI boom to drive data center bandwidth surge
    Also read: Verizon unveils AI assistant for small businesses

    Why it’s important

    The rapid rise in global data centre capex underscores the increasing importance of artificial intelligence in shaping the future of computing infrastructure. As businesses and industries seek to leverage AI, the demand for advanced data centres capable of supporting large-scale AI workloads has grown substantially. The deployment of optimised servers and AI accelerators is now a key investment strategy for major cloud providers, signifying the growing importance of AI in driving technological innovation.

    With NVIDIA and other industry leaders playing pivotal roles, the market for AI infrastructure is likely to become more competitive, leading to even greater advancements in AI capabilities. Moreover, the entry of tier 2 cloud providers into the space signifies that AI infrastructure is no longer solely the domain of the largest players, making it accessible to a broader range of companies. This democratization of AI resources could spur further innovations across industries, particularly in sectors like healthcare, finance, and logistics.

    As data centre investments continue to surge, the long-term impact on global infrastructure will be profound, potentially reshaping how data is processed, stored, and utilised across the globe. The outlook for the next few years suggests sustained growth in data centre spending, with AI remaining at the forefront of technological advancements.

    AI Growth AI infrastructure Capital Expenditures cloud providers data centre
    Joyce Dong

    Joyce Dong is a community engagement specialist at BTW Media, having studied Film and Television at University of South Australia. Contact her at j.dong@btw.media.

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