News Hub

AI will drive data centre CapEx past $500 billion by 2027, says new study

Written by Thu 3 Aug 2023

AI infrastructure spending is expected to push data centre CapEx in excess of £391 billion ($500 billion) by 2027, according to new research by Dell’Oro Group.

Hyperscale cloud service providers are set to prioritise investments toward accelerated systems for AI applications targeting both public cloud platforms and SaaS offerings.

Continuous optimisation across the entire data centre stack is predicted. This will include the deployment of next-generation servers featuring high-core counts and deeper memory that are attached to next-generation networks.

“The rest of the market will invest in accelerated systems more selectively, with most enterprises adopting a hybrid cloud strategy,” said Baron Fung, Senior Research Director at Dell’Oro Group.

By 2027, Dell’Oro predicted that data centre CapEx will grow by 15% as a result of burgeoning AI infrastructure. Meanwhile, more than 20% of global server deployments will feature some form of AI acceleration by the same year.

Near-term cloud and enterprise CapEx is expected 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,” added Fung.

Dell’Oro’s Data Centre IT CapEx 5-Year Forecast Report analysed historical data from 2014 to present day.

Hungry for more tech news?

Sign up for your weekly tech briefings!

Written by Thu 3 Aug 2023

Send us a correction Send us a news tip