Hyperscalers to Account for Half the $1.2 Trillion Global Data Center Capex by 2029

REDWOOD CITY, Calif. 
According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, networks, and data center industries, worldwide data center capex is projected to grow at 21 percent CAGR. We anticipate the hyperscale cloud service providers to account for half of the $1.2 trillion global data center capex by 2029.

“We’ve raised our forecast for data center infrastructure spending, driven by the rapid adoption of AI,” said Baron Fung, Senior Research Director at Dell’Oro Group. “GPUs and custom AI accelerators now account for roughly one third of total data center capex, making them the single largest driver of growth. Spending is also expected to remain strong across supporting infrastructure, including racks, general purpose compute, storage, networking, and physical facilities.

“Hyperscalers are leading the charge with vertically integrated solutions and custom architectures aimed at optimizing performance and lowering the cost of compute. Combined with ongoing investment from both public and private sectors, this is fueling a global wave of data center expansion. To meet this demand, hyperscalers and colocation providers are expected to add over 50 gigawatts of new capacity over the next five years. While a short-term slowdown may occur in 2026, long term investments are expected to sustain growth through the forecast period,” Fung added.

Additional highlights from the Data Center IT Capex 5-Year July 2025 Forecast Report:

• Accelerated servers for AI training and domain-specific workloads could represent approximately half of data center infrastructure spending by 2029.
• While the Top 4 US-based cloud service providers (SPs)—Amazon, Google, Meta, and Microsoft—will account for nearly half of global data center capex in 2025.
• The Rest of Cloud segment, consisting of neo-cloud and GPU-as-a-Service providers, with a CAGR of 39 percent.

About the Report
The Dell’Oro Group’s Data Center IT Capex 5-Year Forecast Report offers a complete overview of the market with historical data from 2014 to the present. The forecasts provide a comprehensive overview of market and technology trends and include tables covering data center and server capex and server unit shipments forecasts for Top 4 US Cloud, Top 4 China Cloud, Top 3 Tier 2 Cloud, Rest-of-Cloud, Telco, and Enterprise customer segments. The report also breakout markets for data center infrastructure equipment, along with server, storage system, and other data center equipment revenues sub-segments.