The AI data center boom: DLA Piper predicts massive $483 billion market surge

The global data center market looks optimistically toward the future: according to a recent study by the law firm DLA Piper, 70% of investors and operators anticipate significant increases in data center investments over the next two years. A central driver is the growing demand for computing power through generative AI, including machine learning and language models.

Despite the positive market development, energy supply remains a major concern. Nearly all study participants (98%) consider energy availability and stability in their investment decisions, with half viewing it as the biggest hurdle.

The study predicts that the global data center market will reach around $300 billion in 2024. With an average annual growth rate of 10%, this value could rise to $483.15 billion by 2029.

Energy supply as a limiting factor

Particularly in the USA, energy supply companies are struggling with a surge in electricity capacity that may not be fully covered until the 2030s. In response, they are demanding high, non-refundable advance payments from investors for land and a fixed electricity offtaker.

Sustainability and regulation in focus

The discussion about data centers’ resource consumption, especially energy and water, is also gaining importance. 70% of respondents expect stricter regulatory requirements. The EU has already introduced a series of measures that impose significant obligations on data center operators to report their emissions and implement reduction measures, including the European Climate Law and the Energy Efficiency Directive.

“Data centers are the backbone of the AI revolution and crucial for the global economy. To meet rising demand, we need not only investments but also clear frameworks and close collaboration among all stakeholders,” explains Lars Reubekeul (PICTURED), Partner and Head of the German Real Estate Practice at DLA Piper. “The need for data centers is also increasing in Germany – an opportunity for investors from traditional asset classes.”