The global data center industry is experiencing a period of rapid expansion, driven by the surging demand for artificial intelligence (AI) applications. According to JLL’s 2025 Global Data Center Outlook, an estimated 10 gigawatts (GW) of data center capacity is projected to break ground globally this year, with 7 GW expected to reach completion.
This significant growth is attributed to the increasing reliance on AI across various sectors, leading to a greater need for robust and efficient data center infrastructure. However, this rapid expansion also presents challenges, including potential supply chain bottlenecks and constraints in electricity development in some regions.
The report highlights the critical role of AI in driving this growth. The advancement of semiconductor technology, particularly the rise of powerful GPUs, is leading to higher rack densities within data centers, demanding more sophisticated cooling systems. Liquid cooling is increasingly being adopted to manage the heat generated by these high-density systems, with immersion cooling emerging as a potential solution for future high-power applications.
The report acknowledges the growing energy demands of the data center industry, emphasizing the need for sustainable solutions. While data centers account for a relatively small portion of global electricity consumption, their energy requirements are substantial. Developers are exploring alternative energy sources, such as natural gas, fuel cells, and even nuclear power, to mitigate reliance on traditional grid power.
Investor appetite for data center assets remains strong, driven by factors such as robust demand for compute power, limited supply due to power constraints, and attractive investment returns. JLL anticipates a record year for data center development financing in 2025. However, the report also suggests a potential slowdown in mergers and acquisitions, with a shift towards increased joint ventures, particularly in developing markets.
Despite the challenges, the outlook for the data center industry remains positive. Continued innovation in technology, coupled with a focus on sustainability and energy efficiency, will be crucial to support the growing demands of AI and ensure the continued growth of this critical sector.