The U.S. is on track to be the fastest-growing data center market
If you’re looking to see what market is going to see the most significant growth in data centers, look no further than the United States.
According to its Construction Market Insights Americas report, global construction consultant Linesight forecasts that data center energy capacity is on track to rise from 25 GW in 2024 to over 80 GW by 2030.
The research firm said that “growth is fueled by an increase in data volume, computational power, and connectivity, driven by digital transformation, cloud adoption, and emerging technologies like artificial intelligence (AI).”
To address new infrastructure demands, capital expenditure for data centers reached a record $31.5 billion in 2024, primarily driven by the surge in AI.
Linesight stated that the capex-to-revenue ratio for major hyperscalers increased from the historical average of 10% to 12%, underscoring the urgent need for expansion.
As new AI models, such as DeepSeek, make AI more affordable, it is leading to uncertainty about the future of AI investments. “While lower costs could lead to more widespread adoption of AI, the market is still in flux, and its long-term direction is not yet clear,” said Linesight.
The AI effect
Despite the attention surrounding AI, non-AI applications still account for the majority of data center demand, which is forecast to reach 55% by 2028, with a steady 7% average annual growth rate from 2023.
GenAI is the fastest-growing segment, with training workloads projected to grow at a 30% average annual growth rate and a 122% increase in demand for inference between 2023 and 2028.
Consider the potential impact of the Stargate Initiative, which plans to invest nearly $500 billion over the next four years in creating AI infrastructure. Initially, Stargate will launch with a $100 billion investment to build large-scale 5 GW data centers, featuring 30 million square feet of facilities equipped with 2 million GPUs.
The emergence of large-scale projects like Stargate and the government investment in AI infrastructure will drive up the power demand, which Linesight said could “hinder future expansion.”
Data center providers are evaluating sustainable energy solutions, such as small modular reactors (SMRs) and carbon capture technologies, two options that can address growth with a less impactful environmental impact.
Another power option being considered is natural gas, which is supported through relationships with utility providers.
Addressing power demands
The ongoing build-out of new data centers also means a greater demand for power.
S&P Global Ratings forecasts that US data centers will need an additional 150-250 terawatt-hours (TWh) of electricity annually by 2030.
However, the need to upgrade the electric infrastructure will make the process challenging.
Linesight said that new grid updates “could lead to higher electricity prices, a shift from the previous two decades of stable demand,” and increase the demand for natural gas.
One option that data center providers are using to address the power issue is to incorporate a "Bring Your Power" (BYOP) process with renewable energy providers, including geothermal, nuclear, solar, and wind.
Additionally, the data center industry is exploring new technologies, such as small modular nuclear reactors (SMRs), to ensure a stable power supply.
As power needs rise, data center providers and power suppliers are exploring various methods to achieve environmental sustainability.
Power providers are seeking to integrate new technologies, such as carbon capture and storage (CCS), into large-scale power generation projects that capture and store a significant portion of CO₂ emissions.
ExxonMobil notes that data centers could represent up to 20% of the market for CCS by 2050.
What is a Digital Twin?
A digital twin is a virtual representation of a real-world entity, such as a physical object, process, or system. It's a dynamic, data-rich model that mirrors its physical counterpart, enabling real-time monitoring, simulation, and analysis. This technology allows for improved decision-making, optimized performance, and predictive maintenance across various industries, including data centers.
In tandem with CCS, Digital twin technology can enhance energy efficiency in data centers by simulating operations to optimize energy usage. Digital twin technology can be used to simulate, design and test scenarios to deliver proof of concept for a planned CCS facility or process.
“A recent development in the US demonstrates how digital twins can be used to improve the efficiency and management of data centers by creating virtual replicas that simulate mechanical, thermal, and electrical systems, enabling real-time management and optimization,” Linesight said.
For related articles, visit the Data Center Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.
About the Author
Sean Buckley
Sean is responsible for establishing and executing the editorial strategies of Lightwave and Broadband Technology Report across their websites, email newsletters, events, and other information products.