The global demand for AI compute power is driving unprecedented growth in the data center industry, with projections estimating the AI data center market to reach $157.3 billion by 2034.
This surge is fuelled by advancements in machine learning, generative AI, and data-intensive applications across industries such as healthcare, finance, and manufacturing.
Data centers are evolving to meet AI-specific requirements, creating significant opportunities for industry channel partners and new venture entrepreneurs. Key opportunities include infrastructure development, advanced cooling solutions, energy-efficient technologies, GPU cloud services, and AI-driven data center management tools.
The sector encompasses various types of facilities, including hyperscale data centers (operated by large tech firms like Amazon, Google, and Microsoft), colocation data centers (leased to multiple tenants), and edge data centers (designed for low-latency AI processing closer to end users). These facilities are equipped with specialized hardware, such as GPUs and AI accelerators, and software tailored to handle the compute-intensive nature of AI workloads, distinguishing them from traditional data centers.
Sovereign AI
A key opportunity segment is defined by ‘Sovereign AI’, refering to the specific scenario of AI services that builds upon the concept of ‘Sovereign Cloud‘ hosting. This ensures that sensitive data and operations remain within the jurisdiction and under the control of that country’s laws and regulations.
By hosting AI applications and data on Sovereign Cloud platforms, organizations can mitigate security risks and ensure sensitive information is protected. Data protection laws and regulations vary across regions, and utilizing these services helps AI companies comply with local data governance requirements.
McKinsey explores the market opportunity this presents for Telcos. Pioneers in this sector include Swisscom, and Telus who is building an AI factory. Headlining the trend is Microsoft launching their European Sovereign Cloud. Thus the sector presents a huge opportunity for the channel, which vendors like Redhat are pursuing.
In this talk Chase Lochmiller, founder of Crusoe, explores this concept and reveals how his company is constructing massive AI data centers in record time to power the next generation of AI.
Innovation Accelerators
There is also the role these facilities will play in promoting and accelerating business and economic innovation.
Access to secure and compliant cloud infrastructure fosters a conducive environment for AI research and development, driving innovation. Secure cloud environments facilitate collaboration among AI researchers, enabling the sharing of insights and advancements in the field.
For example Data Centre Magazine writes that the UK government is gearing up for massive data centre growth, with Labour planning policies to drive major investment into the sector. As reported here US firms CyrusOne, ServiceNow, Cloud HQ and CoreWeave announced the UK will be the home for their data infrastructure worth a total of £6.3 billion, with Technology Secretary Peter Kyle welcoming the ‘vote of confidence’ in Britain.
AI Gigafactories
The European Union has launched an ambitious initiative to establish advanced AI centers, termed “AI gigafactories,” to bolster its position in the global AI race.
European Commission President Ursula von der Leyen announced the InvestAI initiative at the AI Action Summit in Paris, which includes a €20 billion ($21.4 billion) fund to finance the construction of up to five AI gigafactories across Europe. These facilities are designed to train complex AI models, each equipped with over 100,000 next-generation AI chips, significantly surpassing the capacity of existing EU AI factories, which house up to 25,000 processors.
The goal is to enhance Europe’s AI capabilities, reduce reliance on U.S. and Chinese technology, and support industries like healthcare, biotech, climate science, and robotics.
