Data centers must navigate AI advancements and sustainability challenges, says GlobalData
Data centers are expanding at record speed to meet the dual pressures of artificial intelligence (AI) workloads and sustainability demands. With AI driving unprecedented growth in capacity, investment, and infrastructure scale, operators must also address mounting sustainability challenges such as soaring electricity consumption, cooling requirements, and water usage, making innovation in energy efficiency and green technologies increasingly critical, according to GlobalData, a leading data and analytics company.
GlobalData’s Strategic Intelligence report, “Data Centers,” reveals that AI workloads are pushing the boundaries of data center capacity, with most AI training occurring in large-scale facilities. Data centers provide stability and computing power, allowing businesses to run important applications, store valuable data, and deliver online services. As a result, data centers have become essential for modern life and are increasingly recognized as a critical utility.
The scale of investment in data center infrastructure is unprecedented. Microsoft, Alphabet, Amazon, and Meta reported combined capital expenditure (capex) of $245 billion in 2024, and these companies’ forecasts suggest this spending could exceed $360 billion in 2025, primarily driven by AI-related investments.
Martina Raveni, Analyst in the Strategic Intelligence team at GlobalData, comments: “They are competing to build large data centers and fill them with specialized chips to stay ahead in the race for AI dominance.”
Most AI training takes place in large-scale data centers. AI models require high-performance computing (HPC) infrastructure, specialized chips, large memory, and advanced cooling systems, making modern data centers essential to power AI development.
Being significant drivers of electricity demand, data centers face a huge sustainability challenge. According to the International Energy Agency (IEA), their electricity consumption will more than double to approximately 945 terawatt-hours (TWh) by 2030, up from 415TWh in 2024. Cooling and air conditioning systems consume a lot of energy, and water use is another significant environmental issue associated with data centers.
Raveni concludes: “Tech giants and data center operators are increasingly shifting to low-carbon energy solutions to meet growing power demands within their data centers. Companies that develop and deploy innovative cooling technologies, particularly liquid cooling, will likely see increased demand.”
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- Quotes provided by Martina Raveni, Analyst in the Strategic Intelligence team at GlobalData.
- Information is based on GlobalData’s Strategic Intelligence report: Data Centers. It includes a comprehensive industry analysis, including forecasts for data center and hosting revenues to 2029. The detailed value chain comprises four layers: data center energy sources, data center infrastructure, connectivity, and data center services.
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