AI workloads become a growth engine for Data Center Physical Infrastructure

Data Center Physical Infrastructure (DCPI) market growth, according to new research from Dell’Oro Group, is forecast to grow at a 10 percent compound annual growth rate (CAGR) from 2022 to 2027.

The research firm said that DCPI vendor backlogs and easing supply chain constraints will drive double-digit market growth in 2023. Further, as these market dynamics wane throughout the rest of the year, AI workloads, including Generative AI, are emerging as new long-term drivers for DCPI market growth.

Supported by historically high DCPI vendor backlogs, DCPI revenue growth is forecast to remain resilient in 2023, growing at a double-digit rate. Data Center Cabinet Power Distribution Busway, and Thermal Management are forecast to grow at the fastest rates during the forecast period.

 From a regional perspective, Dell’Oro said that Asia Pacific (Excluding China) and North America are forecast to grow at the fastest CAGR during the forecast period, followed by EMEA and China.

Lucas Beran, Research Director at Dell'Oro Group, said “There is a change unfolding” in the DCPI market.”

"The excitement Generative AI is creating at industry events and in my discussions with ecosystem vendors is palpable," said Beran. "I already see AI workloads leading to a broad proliferation of accelerated computing infrastructure. This will require investments in next-generation data center physical infrastructure to support new architectures with higher power and thermal management requirements.”

However, he added that market growth won’t happen right away. “Planning and designing for AI deployments at scale is already underway, but this will materialize in market growth after some time,” Beran said. “For example, deployments of Meta's recently announced data center architecture changes will occur through 2027.”

A key enabler in deploying AI infrastructure in data centers will be the advent of liquid cooling. "As we've seen in the High-Performance Computing industry, air cooling can’t support the thermal management requirements of accelerated servers, with cost, performance, and sustainability in mind,” Beran said. “This has led to an upward revision of our liquid cooling forecast, approaching $2 billion by the outer years of our forecast. The mix has also shifted towards more Direct Liquid Cooling (DLC) based on early ecosystem support momentum.”

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