For the period 2018–2023, the region even ranked first in Live/Early Stage Supply growth, according to one DC intelligence report

Using a range of resources such as satellite observation imagery; analyses of official earnings releases and public planning documents; stakeholder comments; physical inspections and quantitative and qualitative insights from tracking nearly 7,000 individual data centers in the Americas, Asia Pacific region (APAC) and Europe, the Middle East and Africa (EMEA) from 2018 to 2023*, a data center (DC) market intelligence firm, DC Byte, has released a report of industry trends for the period.

First, at 17.4GW of Live Supply in 2023, the data center industry in the Americas remained the market leader across all supply categories. Growth remained robust and the democratization of AI (including GenAI and machine learning) is attributed to this progress.

Second, the DC industry in the APAC experienced the strongest growth of 19.1% compounded annual growth rate (CAGR) for the five-year period, with momentum expected to continue. Developed markets such as Australia, China, Japan, and Singapore each contributed over 500MW to the 6.5GW of regional Live Supply growth over this period. Emerging markets within South and Southeast Asia had also seen growing interest in more recent years — the highly populous and young demographics of these countries present strong untapped potential for DC demand. Tokyo demonstrated growth despite market maturity in cloud demand, as did Mumbai with a booming market boasting 2.6GW capacity and significant development in Powai/Chandivali and Thane. Johor emerged as South-east Asia’s fastest-growing market, expanding to over 1.6GW capacity in three years due to Singapore’s stricter rules on new DC projects.

Third, the EMEA region’s DC industry had grown at a 13.6% CAGR, with the established FLAP-D markets (Frankfurt, London, Amsterdam, Paris, and Dublin) experiencing the strongest growth, adding an average of 450MW of Live Supply each. AI is said to continue to drive data center growth further there, and there is an emerging trend of operators and hyperscalers expanding outside of the established clusters where there is a greater offering of land and power to meet the specific needs of AI applications.

APAC DC industry outlook

According to the report, the region’s DC industry is expected to continue to exhibit robust growth due to an influx of international operators from other regions and the establishment of multiple new platforms as both global and local real estate developers and investment funds attempt to penetrate the industry.

As these markets continue to grow, it is surmised that there will eventually be market consolidation as some players find more success than others, whether it is due to being in strategically significant locations, price competitiveness, or the ability to leverage existing customer relationships in other markets, etc. Growth is expected to stabilize as more of these markets mature: however the region remains behind the others in terms of overall business environment, regulations, and maturity of the industry.

Additionally, all of this room for development is now coupled with the explosion of generative AI. The latter technology’s effects on DC industry growth remains to be seen as the region is only just beginning to observe land acquisitions that are speculated to be for potential AI training workloads. Operators have been receiving enquiries for AI-specific colocation requirements that include higher rack densities than existing design specifications cater to, leading to ineffective use of space as adjacent racks are removed to concentrate power into just one or two racks per row.

Few AI deals have been signed across the markets to date, but as this demand category grows, site-selection strategies, design specifications, and technologies employed in high-density AI data centers will differ from current practices in this new market segment. This is likely to further boost supply and growth trajectories for the region.

*Data for Russia data centers made defunct since the Russia-Ukraine War; China data based on key operators in the major metros only