AI is the catalyst for data centre spending

According to a recently published report from Dell’Oro Group, worldwide data center capex is forecast for a compound annual growth rate of 18 percent as investments shift towards AI. We anticipate accelerated computing that are optimized AI workloads will account for a quarter of the data center capex.

“Accelerated computing optimized for domain specific workloads such as AI is forecast to exceed $200 billion by 2028, with the majority of the investments deployed by the hyperscale cloud service providers,” said Baron Fung, Senior Research Director at Dell’Oro Group. “In order to drive long-term sustainable growth, the cloud service providers will seek to streamline general-purpose computing infrastructure costs by transitioning to next-generation server platforms and rack-scale architectures. We also anticipate increased vertical integration efforts by the hyperscalers to control costs and bring further optimizations for their full stack. Meanwhile, the enterprise segment faces near-term headwinds related to economic uncertainties, and will adopt a hybrid cloud model for AI and traditional IT workloads,” explained Fung.

Additional highlights from the January 2024 Data Center IT Capex 5-Year Forecast Report:

Worldwide server unit shipments are forecast to grow 8 percent by 2028.

Over twenty percent of the global server deployments in 2028 are forecast to be accelerated.

By 2028 the Top 4 US-based Cloud SPs—Amazon, Google, Meta, and Microsoft—will account for half of global data center capex.

Chronosphere introduces innovative AI-guided solutions to enhance production incident...
Trust in autonomous AI is rising, yet widespread adoption lags with UK leading in maturity.
Discover the features of Red Hat Developer Hub 1.8, designed to enhance developer productivity and...
Reading FC partners with Score to enhance game performance through Vision AI technology,...
UK businesses report a 5% increase in mass dismissals amid upcoming Employment Rights Bill...
Globant partners with LALIGA to integrate AI, reshaping operations and innovation in European...
SentinelOne partners with AWS to enhance AI security measures, ensuring robust protection across...
VAST Data has teamed up with CoreWeave in a $1.17 billion agreement to advance AI cloud...