AI infrastructure investments will lift data centre capex to over US$500 billion by 2027: Dell’Oro

AI infrastructure spending will propel data centre capex to over a half trillion U.S. dollars by 2027, according to a recently published report from Dell’Oro Group. However, it anticipates near-term cloud and enterprise capex growth to decelerate as the market undergoes digestion.

The report also notes that worldwide data centre capex is forecast to grow 15 per cent by 2027, and over 20 per cent of the global server deployments in 2027 may be accelerated. In addition, its edge computing forecast was trimmed as the ecosystem and compelling use cases have been slow to materialize.

“Despite near-term data centre capex growth headwinds as the major cloud service providers and enterprises optimize their infrastructure, forthcoming technology transitions will stimulate long-term growth,” said Baron Fung, senior research director at Dell’Oro Group.

“Most notably, the hyperscale cloud service providers will prioritize their investments toward accelerated systems for AI applications for both their public cloud platform and SaaS offerings. We will see continuous optimization across the entire data centre stack, with the deployment of next-generation servers featuring high-core counts and deeper memory that are attached to next-generation networks.

“Meanwhile, the rest of the market will invest in accelerated systems more selectively, with most enterprises adopting a hybrid cloud strategy.”

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