Description
AI-driven compute infrastructure is increasingly driving capital expenditure (CapEx) investments in the hyperscale sector, creating a growing market for data center infrastructure. Hyperscalers are making long-term plans, securing land, and procuring power, which will further boost data center consumption. In 2023, total hyperscale cloud CapEx reached $185.2 billion, with about 90% directed towards data centers and server infrastructure. As demand for generative AI infrastructure rises, significant increases in CapEx are expected for 2024, already evidenced by growth in early 2024. Although there has been some recovery from supply chain delays and power constraints that impacted CapEx during the pandemic, fluctuations in spending may continue due to the timing of infrastructure builds, with platforms like AWS, Google Cloud, and Meta reversing previous CapEx declines.
