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lobal property consultant JLL reports that artificial intelligence (AI) applications are expanding rapidly across industries, with the data center sector playing a crucial role in supporting AI adoption and advancement. To meet soaring demand, the data center industry is set to experience extraordinary growth in 2025.
The hyperscale and colocation segments are expected to see significant development of approximately 10 GW globally in 2025, with 7 GW likely reaching completion. The global data center market is projected to grow at a baseline compound annual growth rate (CAGR) of 15% through 2027, potentially reaching 20%. However, rapid expansion presents challenges, including demand surpassing supply and electricity constraints.
"The pace of AI innovation is not slowing, and the data center industry must continue to adapt," said Jonathan Kinsey, JLL EMEA Lead and Global Chair, Data Centre Solutions. "AI's transformative power demands have already reshaped our world, but its most significant impact may be in how we address the substantial energy demands required to fuel this revolution."
The AI revolution is driven by rapid progress in semiconductor technology, with GPUs becoming significantly more powerful over the past two years. This increased density presents a critical challenge: managing the heat generated by energy-intensive GPUs. Liquid cooling is becoming the standard for new data center developments, and immersion cooling is expected to become more common as GPUs surpass 150 kW per rack.
While AI is a major driver of demand, it is estimated to account for less than 50% of total data center demand by 2030. Traditional workloads like data storage and cloud applications will continue to dominate. "Even though not all data centers will specialize in AI, every facility--new or existing--can benefit from more energy-efficient operations and improved technology integration," said Andrew Green, JLL Regional Data Center Practice Lead, Asia Pacific.
Global data center energy demand is forecasted to double over the next five years, with power transmission bottlenecks remaining a significant issue in key markets. Developers are exploring alternative energy solutions, including natural gas and fuel cells, as well as large-scale nuclear power, particularly small modular reactors (SMRs).
Investor interest in data centers will remain strong through 2025, driven by demand for computing power, low supply, attractive returns, and the growing excitement around AI. JLL anticipates another record year for data center financing, with global trading volume expected to see moderate growth.
Despite challenges such as supply constraints and power limitations, the outlook for the data center industry remains highly positive. Driven by AI adoption, increasing data processing needs, and technological advancements, the sector is poised for sustained growth and innovation.
