TITLE: Global Data Center Investment Hits Record $61 Billion in 2025

Record Investment in Data Centers

Global investment in data centers reached a record $61 billion in 2025, marking a slight increase from the $60.8 billion spent in 2024, according to a report from market intelligence firm S&P Global. The surge is primarily attributed to the rapid growth of artificial intelligence technologies, which require vast computational resources and infrastructure.

The report describes the current market as a "global construction frenzy that shows no signs of slowing." This expansion involves significant outlays for real estate, hardware and energy systems to meet the escalating demands from AI developers and operators. With AI applications proliferating across industries, companies are racing to build or acquire facilities capable of handling intensive data processing.

In the United States, the number of data centers stands at approximately 4,000, compared to about 500 in the United Kingdom, based on global tracking data. These facilities form the backbone of cloud computing and AI services, hosting servers that power everything from chatbots to advanced analytics.

Drivers of the AI Boom

The artificial intelligence sector has been a key catalyst for this investment spike. AI models, particularly large language models and generative tools, demand enormous amounts of processing power, leading to a scramble for data center capacity. Investors, unable to purchase existing facilities at scale, are increasingly funding new constructions worldwide.

"Unable to buy, many investors are turning to new builds," noted an S&P Global analyst. This shift underscores the competitive landscape, where tech giants and startups alike are securing infrastructure to maintain their edge in AI innovation.

However, the pace of investment has raised concerns about sustainability and returns. Some market observers worry that the AI industry may be overspending on unproven technologies, potentially leading to a correction if profitability lags. Last week, shares of Oracle Corp. fell 11% following a quarterly earnings report that missed analyst expectations. The decline also affected stocks of other AI-related firms, highlighting investor skepticism.

Critics have pointed to seemingly circular deals among major players, including Oracle, Nvidia Corp. and OpenAI, as evidence of inflated valuations. These arrangements, where companies cross-invest in each other's technologies, have drawn scrutiny for potentially masking underlying financial risks.

Energy Demands and Projections

The environmental and energy implications of this growth are substantial. The International Energy Agency (IEA) projected in a recent report that global electricity consumption by data centers will more than double by 2030, reaching 945 terawatt hours. This figure exceeds Japan's current total electricity use, equivalent to the output of hundreds of power plants.

S&P Global anticipates that the global data center footprint will expand at a faster rate over the next five years than in the previous half-decade. This acceleration is driven by the need for facilities optimized for AI workloads, which are both energy- and compute-intensive.

"The global data center footprint is projected to expand at a faster rate over the next five years than it did in the previous five, spurred by demand for energy- and computer-intensive AI workloads," the report states. Regional variations are evident, with North America leading in capacity, but Europe and Asia are seeing rapid catch-up through new projects.

Protests against proposed data centers have emerged in some areas, such as Decatur, Georgia, where residents oppose a facility backed by prominent investors. Concerns include noise, water usage and strain on local power grids, reflecting broader tensions between technological advancement and community impacts.

Financial Risks in AI Expansion

Amid the optimism, financial analysts have issued stark warnings about the scale of losses in the AI sector. A recent analysis from Deutsche Bank estimated that OpenAI, the maker of ChatGPT, will incur $143 billion in expenditures between 2024 and 2029—the year the company projects profitability.

This spending trajectory dwarfs historical benchmarks for tech startups. For context, the report compares OpenAI's burn rate to those of Amazon, Tesla and Uber during their early growth phases, noting that no previous venture has operated at such a deficit.

"Of course, OpenAI may continue to attract significant funding and could ultimately develop products that generate substantial profits and revolutionize the world," wrote Jim Reid, managing director of macro research at Deutsche Bank. "But at present, no startup in history has operated with losses on anything approaching this scale. We are firmly in uncharted territory."

Deutsche Bank's chart illustrates OpenAI's planned investments outpacing those of past tech giants by orders of magnitude, positioning the company as a bellwether for the AI industry's fiscal health.

Broader Implications

The data center boom extends beyond AI to encompass cloud services, big data and emerging technologies like edge computing. Governments and regulators are increasingly focused on the sector's energy footprint, with calls for greener infrastructure and efficiency standards.

In the UK, for instance, the limited number of facilities compared to the US highlights opportunities for growth but also challenges in securing sites and power supplies. Globally, the IEA's projections suggest that data centers could account for up to 8% of total electricity demand by 2030 if current trends persist.

As investments continue to pour in, the balance between innovation and prudence will be critical. While the AI-driven frenzy promises transformative advancements, it also risks exacerbating energy shortages and environmental strains without careful management.

This report draws on data from S&P Global, the IEA and Deutsche Bank, providing a snapshot of a market in flux. The coming years will test whether the infrastructure buildout translates into enduring economic value or serves as a cautionary tale of overextension.