Over the past decade, the once-niche piece of IT infrastructure- data centers- has become the talk of the investment world and a massive revenue driver for tech giants.
Amazon Web Services generate almost 20% of the e-commerce giant`s revenue today. At the same time, Nvidia, the supplier of parts for modern cloud storage and processing data centers has grown into the world`s third-largest tech company.
The surging use of AI technologies, which require significant computing power and storage, has only fuelled the data center boom, which is expected to continue in the following years.
According to data presented by Stocklytics.com, the global data center market is expected to grow by 30% and hit over $430 billion value by 2028.
The widespread adoption of cloud computing has significantly transformed the data center landscape. While it has reduced the number of organizations operating their own data centers, it has also spurred a surge in the global data center count. This is largely due to the aggressive infrastructure expansion by major hyperscalers like Microsoft Azure, Google Cloud Platform, and Amazon Web Services to cater to their growing customer base. Other tech giants, like Nvidia, have also reaped the benefits of this trend, with its GPUs becoming an integral part of modern data centers.
The surging need for data center solutions and technology has helped the entire market grow revenues by almost 40% since 2016. However, the market projections for the following years are just as optimistic.
According to a Statista Market Insights survey, the global data centers market is expected to gross over $344 billion in revenue this year, $15 billion more than in 2023. The entire market is projected to grow by a CAGR of 6.5% in the following years, resulting in a market volume of $438 billion by 2028.
Most of that value will come from network infrastructure, the market`s largest and fastest-growing segment. Statista expects the network infrastructure to bring in $256.1 billion in revenue in 2028, almost 30% more than this year. Data center servers follow with $120 billion in revenue and a 24% growth in this period. Although far behind in revenue, the data center storage segment will also see double-digit growth, with revenue rising by 22% to $62 billion in the next four years.
The Statista data also gave an interesting insight into the biggest drivers of data center market growth and which countries have the highest share in total revenue. Statistics show that GDP growth was the single largest market driver, with a 3.2% share in total market growth last year. The impact of the Russia-Ukraine war, which led to increased demand for data center services due to geopolitical tensions and cybersecurity concerns, followed, with 2.3% share in total market growth. Technology adoption and innovation also played a significant role, with a 1.9% share.
In global comparison, the United States will remain the single largest player in the global data center landscape, generating nearly $100 billion, or roughly 30% of total market revenue in 2024. This figure is expected to grow by 25% and hit over $125 billion by 2028.
Although Chinese data center revenues are far from these figures, the Chinese market will see the biggest growth in the following years. Statista expects the Chinese data centers segment to increase by 33% and hit a $93 billion value by 2028. Other top markets, Japan, Germany, and the United Kingdom, will see similar growth rates, with their revenues growing by 32%, 27%, and 31% in this period, respectively.
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