Over the past decade, data centers, once a niche piece of IT infrastructure, have become a focal point for investors and a substantial revenue driver for tech giants. Amazon Web Services now generates almost 20% of Amazon’s revenue.
Simultaneously, Nvidia, a key supplier of components for modern cloud storage and processing data centers, has grown into the world’s third-largest tech company. The increasing use of AI technologies, which demand significant computing power and storage, has further fueled the data center boom, a trend expected to continue in the coming years.
The increasing adoption of AI technologies, which demand significant computing power and storage, has only accelerated the data center boom, a trend expected to continue in the coming years.
According to data from Stocklytics.com, the global data center market is projected to grow by 30% and reach a valuation of over $430 billion by 2028.
The widespread adoption of cloud computing has dramatically transformed the data center landscape. While it has reduced the number of organizations operating their own data centers, it has also spurred a surge in the global data center count.
This surge is largely driven by major hyperscalers such as Microsoft Azure, Google Cloud Platform, and AWS, which are aggressively expanding their infrastructure to meet the demands of their growing customer base. Tech giants like Nvidia have also benefited from this trend, with its GPUs becoming a crucial component of modern data centers.
The surging demand for data center solutions and technology has propelled the market’s revenue by nearly 40% since 2016. Market projections remain optimistic. A Statista Market Insights survey forecasts the global data center market to generate over $344 billion in revenue this year, up $15 billion from 2023. The market is expected to grow at a compound annual growth rate (CAGR) of 6.5%, reaching $438 billion by 2028.
Most of this value will stem from network infrastructure, the market’s largest and fastest-growing segment. Statista projects network infrastructure revenue to reach $256.1 billion by 2028, almost 30% higher than this year. Data center servers follow, with revenue projected to hit $120 billion, reflecting a 24% growth. Although smaller in revenue, the data center storage segment is expected to see double-digit growth, with revenues rising 22% to $62 billion over the next four years.
Statista’s data provides insights into the key drivers of data center market growth and the countries with the highest revenue shares. GDP growth was the single largest market driver last year, contributing 3.2% to total market growth. The Russia-Ukraine war, which heightened demand for data center services due to geopolitical tensions and cybersecurity concerns, contributed 2.3%. Technology adoption and innovation also played significant roles, accounting for 1.9% of market growth.
Globally, the United States remains the largest player in the data center market, generating nearly $100 billion, or roughly 30% of total market revenue, in 2024. This figure is expected to grow by 25%, reaching over $125 billion by 2028.
ALSO READ: UGANDA: DIGITAL REGULATORS CONVERGE AT GSR-24 TO UNEARTH BENEFITS OF TRANSFORMATIVE ICT
Although China’s data center revenues currently lag behind those of the United States, the Chinese market is poised for the most significant growth in the coming years. Statista anticipates the Chinese data center segment to grow by 33%, reaching a valuation of $93 billion by 2028. Other top markets, including Japan, Germany, and the United Kingdom, are expected to see similar growth rates, with revenues increasing by 32%, 27%, and 31%, respectively.
