GenAI is lighting a fire under hyperscale DC capacity growth

• The capacity of hyperscale datacentres is set to accelerate at a rapid pace over the next five years
• It is set to grow by almost threefold by 2030, according to Synergy Research Group
• Generative AI (GenAI) is the main catalyst for capacity expansion
• That’s good news for datacentre tech vendors, which had a great 2024

The demand for IT resources fuelled by generative AI (GenAI) workloads is leading to an acceleration in capacity growth across the world’s hyperscale datacentres, with total capacity in those facilities set to triple by 2030, according to a new forecast from the team at Synergy Research Group – see graph, above.   

The analysts expect the average capacity of hyperscale datacentres to be opened over the next four years will be almost double that of current operational hyperscale facilities. “The trend has always been for the critical IT load of hyperscale datacentres to grow in size over time, but generative AI technology and services are power hungry and have supercharged that trend,” according to the research firm.  

And, of course, the number of operational hyperscale datacentres is also set to grow throughout the remainder of this decade – there are 1,103 already up and running around the world and the Synergy Research team is aware of plans for about 400 more to be built over the next four years – while some existing facilities will be retrofitted to enable greater capacity. 

“The number of operational hyperscale datacentres continues to grow inexorably, having doubled over the past five years,” said John Dinsdale, a chief analyst at Synergy Research Group. “That installed base will continue to grow, but the most marked change in the market is the ever-increasing capacity of datacentres that are being brought online. The math is complicated as the mix of hyperscale datacentres continues to change  – old versus new, region by region, and owned versus leased – but in aggregate we will see GPU-oriented infrastructure leading to a doubling of the capacity of new hyperscale datacentres,” added Dinsdale. 

The Synergy Research team’s analysis of the hyperscale datacentre sector is focused on the investments, operations and plans of 19 cloud and internet services companies that meet its ‘hyperscale’ criteria – the likes of Amazon Web Services (AWS), Microsoft, Google, Meta, Alibaba, Tencent and Apple. Combined, these companies currently account for about 41% of global datacentre capacity, though this is expected to rise to 60% of global capacity by 2029.

Those hyperscale companies and the rest of the datacentre sector massively increased their investments in hardware and software in 2024, according to a separate report from the Synergy Research team, with GenAI demand driving an anticipated 34% year-on-year increase in datacentre capital expenditure (capex) last year to $282bn (with that number based on financial reports for the first nine months of 2024, plus the research firm’s forecast for the fourth quarter). The increase was driven by a marked upturn in investments by public cloud infrastructure companies and enterprises. 

“GPUs and generative AI systems lit a fire under the market in 2024, resulting in record growth rates for the industry,” noted Dinsdale. “While the ongoing success of public cloud has been the main driving force behind datacentre investments for well over a decade now, no-one imagined a 2024 market for datacentre gear reaching over $280bn. It is good to see the enterprise side of the market growing again, though the long-term trend remains. Ten years ago, sales to public cloud providers accounted for just 20% of the market. That rose to 55% in 2024, and our forecast shows it reaching almost 65% five years from now,” he added. 

- Ray Le Maistre, Editorial Director, TelecomTV