Investor sentiment towards Data Centers higher than ever

Investor sentiment towards AI and data centers is higher than ever and laser focused on players with land, renewable energy, energy efficient operations and onsite power generation. Data center construction in the US alone added one percentage point to GDP growth in the first quarter of 2025. ¹   The shift to the AI era presents a powerful generational accelerator with substantial investment opportunities.

Yet data center expansion globally is confronted by limited land and fiber availability, severe grid power constraints, and increasingly strict sustainability regulations. These realities impact the market but are not fundamental shifts in hyperscale strategies. In the US, 75% to 85% of new data center capacity through 2029 is already pre-leased with investment-grade hyperscales. ²     Hyperscalers also need partners with the global reach to deliver at scale.  

Navigating this evolving landscape while balancing risk, return, and operational complexity does presents significant challenges.  

Despite elevated uncertainty and capital markets volatility, we live in a data-dependent world where “our lives are migrating online”. ³     Demand for data processing and storage is robust as AI-fuelled urgency transforms infrastructure investment in data centers “housing the entire value chain of the digital economy”. ⁴

With 11,800 facilities worldwide ⁵     the global data center market is reportedly valued at approximately USD 324 billion ⁶     equivalent now to approximately 32% of the global aviation market.  

Estimates suggest data created consumed and captured globally will be 181 zettabytes by the end of 2025. ⁷

Digital infrastructure requires enduring long-term capital to provision for the abundance of opportunities that lie ahead. According to McKinsey almost $7 trillion in capital outlay for data centers will be needed by 2030: around  $5.2 trillion to handle AI processing loads, and a further $1.7 trillion for facilities powering traditional IT applications. ⁸ 

This substantially exceeds the estimate made in 2024 by Blackstone of $2 trillion in generative AI related investment worldwide over the next 5 years. ⁹   and reveals how quickly these markets are moving. 

Billions of dollars are being committed. NTT for example has executed a $16bn buy-out of NTT Data to focus on launching agentic AI platforms globally. ¹⁰     Given hyperscalers’ ability to self-fund their AI initiatives, it is less likely that today’s high interest rates will curtail their investments. Meta is seeking $29bn in private credit. xAI and the Grok platform is raising $10bn in debt and equity.

The data center market is supply constrained today and may also be for the long term, indicating sustained growth in the asset class.

Total Capex investment allocated to data centers increased to an estimated US$329bn in 2024, a figure set to rise to $405bn in 2025. ¹¹

The majority of current Capex spend relates to GPUs and other AI. 

Total infrastructure assets under management reached an all-time high of $1.3 trillion in 2024, yet fundraising is below its 2022 peak reflecting lingering investor caution. ¹²

Hyperscale data centers have been the primary beneficiaries of this growth, attracting more than 80% of total investment. ¹³

According S&P Global, just five AI hyperscalers are currently projected to spend more than $1 trillion in capex collectively from 2024 to 2027, which in turn is driving massive revenue expectations for AI hardware names.

AI is the next transformative technology wave and will create significant economic value and reach an order of magnitude better performance, energy-efficiency and cost. Nvidia has said that Generative AI is the most important computing platform of our generation. ¹⁴

“We still see AI, one of the most revolutionary technological advancements in recent history, as a multi-year opportunity. It is only just starting to show up in corporate bottom lines.” ¹⁵

“AI is not a speculative bubble …It is indeed a revolution, and it has only just begun”. ¹⁶

To address AI driven capex Private Equity firms until recently have been forming new commercial alliances to create bigger pools of capital to address evolving exponential growth.

Private equity firms are most interested in exposure to hyperscale development pipelines, AI-specialized colocation providers, and modular infrastructure platforms that can meet AI’s unique density and cooling requirements.

Investment volumes have risen, with a notable increase in joint ventures between data centre operators and institutional investors. ¹⁷

REFERENCES

1. https://www.apolloacademy.com/datacenter-construction-contributing-one-percentage-point-to-gdp-growth/
2. AI data center race hits obstacles in power grid, land costs May 28, 2025.
3. Jonathan Gray, President and Chief Operating Officer, Blackstone – quoted on Bloomberg Invest
4. KKR
5. Data Center Hawk
6. A report from www.whiteshield.ai commissioned by Khazna (Abu Dhabi)
7. IDC quoted in Network World
8. McKinsey
9. Blackstone, Wall St Journal, 31 July 2024
10. https://www.reuters.com/markets/deals/japans-nippon-telegraph-mulls-buying-remaining-ntt-data-shares-209-billion-2025-05-07/ 
11. FDI Intelligence quoting Gartner
12. Quoted in Diginomica.com
13. Diginomica.com [ibid]
14. Jensen Huang, CEO, Nvidia quoted in https://www.fanaticalfuturist.com/2023/06/nvidia-chief-says-everyone-will-soon-be-a-programmer/
15. JP Morgan
16. JP Morgan
17. Savills