Navigating Global Growth in Data Centres - Riding the AI Wave

Data centre dealmaking continued its rapid rise in 2024 and the fundamentals of the data centre market remain robust for the year ahead, largely driven by increasing AI demand.

According to TMT Finance analysis, the average valuation of the global data centre market is expected to be around USD300 billion in 2024, with a projected average compound annual growth rate (CAGR) of approximately 10% over the next five years.

One of the key findings raised by respondents was the growing need for infrastructure that can support AI-driven applications and the increasingly critical role data centres play in enabling advanced digital services. Other concerns included energy supply, grid connectivity, power availability, infrastructure reliability and ESG considerations.

AI applications, such as machine learning, natural language processing and computer vision, require substantial computational power and data storage, which in turn drives the need for more data centres. Half of respondents (50%) believe machine learning will be the largest demand driver, followed by natural language processing (34%).

The survey highlights that access to green energy is considered a pivotal measure to implement ESG considerations, as it plays a prominent role in reducing carbon footprints, enhancing sustainability and meeting regulatory and stakeholder demands for environmentally responsible operations. Over half (57%) said they bought energy from renewable sources. In addition, redirecting heat generated by data centres (26%) and self-regulation (22%) are also tipped as important means to make data centres more ESG-friendly. For data centres connected to renewable energy sources, 22% of those surveyed expect that 20-30% of the power will come from renewable sources. Another 21% anticipate this figure to be 10-20%, while 13% foresee a higher range, with 30-40% of the power being renewable.