CHICAGO, Jan. 13, 2025 – Artificial intelligence applications are rapidly expanding across industries, and the global data center industry plays a critical role in AI adoption and advancement. To meet the exponential data center demand, the sector will grow at a phenomenal pace in 2025. JLL’s 2025 Global Data Center Outlook explores how AI is not only driving demand but the development of more powerful and efficient data center infrastructure that balances computing power and sustainability.

Across the hyperscale and colocation segments, an estimated 10 GW is projected to break ground globally in 2025, while 7 GW will likely reach completion. Based on this current pace of under construction and planned developments, the global data center market will likely expand at a baseline 15% CAGR through 2027 – with the potential to reach 20%. Rapid expansion brings challenges, including demand outstripping supply and electricity development constraints in some markets. The industry also faces numerous opportunities such as the immergence of new technologies providing novel pathways for sustainability.

“The pace of AI innovation is not slowing down, and the data center industry must continue to adapt,” said Jonathan Kinsey, JLL EMEA Lead and Global Chair, Data Centre Solutions. “AI’s transformative power demands have already reshaped our world, yet its most significant and enduring effect may lie in how we rise to meet the substantial energy demands required to fuel this technological revolution. The results will fundamentally reshape data center design and operation.”

Investor appetite for data centers will remain strong through 2025 due to demand for compute power and data storage, low supply due to power scarcity, attractive returns and growing excitement around AI’s potential. JLL anticipates data center development financing will have another record year in 2025, while global data center trading volume is likely to moderately increase in 2025.

“Data center activity has exploded over the last few years, with much of the demand geared toward single-tenant ground-up construction,” said Carl Beardsley, U.S. Data Center Leader, JLL Capital Markets. “Significant barriers to entry exist for new investors based on the amount of capital required as well as a longer development cycle. In 2025, we expect many opportunities for core investors to recapitalize the single-tenant data centers that continue to be built.”

M&A investment volume and megamergers will likely slow, but JLL expects an increase in joint ventures in 2025, particularly in developing countries as industry firms partner with regional groups to help navigate the local political, regulatory and business landscapes.

Despite challenges, including supply constraints and electricity limitations in some markets, the outlook for the data center sector remains highly favorable. The industry is poised for continued growth, driven by AI adoption, increased data processing demands and ongoing technological advancements.

Your data has never been more critical, and neither has your data center partner. From site selection and land acquisition to upgrades and facilities and energy management, JLL’s team of dedicated technical experts are trained and experienced in every phase of the data center lifecycle to help you scale, optimize and maintain efficiencies in your data center strategy. Our solutions enable your business to make higher-quality decisions and enter new markets with reduced friction through local market expertise, business intelligence, proprietary data and cutting-edge technology tools. To learn more, visit here.

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