Tech & AI
Global data-centre spending set to more than double to $2.1 trillion by 2028, BofA forecasts
BofA Global Research expects about $1 trillion of spending this year and puts the cost of an AI-focused 'neocloud' site at roughly $57 million per megawatt.
HedgeWeekly Tech & AI Desk ·
Worldwide spending on data centres is on course to reach about $1 trillion in 2026 and to climb to $2.1 trillion by 2028, according to a note from BofA Global Research published on Friday and reported by Reuters. The bank linked the increase to rising demand for, and development of, artificial-intelligence services.
BofA put the value of the data-centre market at $275 billion in 2022 and said it could reach $2.93 trillion by 2030, implying compound annual growth of 37% across the market between 2025 and 2030. It estimated that building a data centre costs about $49 million per megawatt of capacity, with IT equipment accounting for 78% of the total.
So-called neoclouds, operators that rent out AI computing power, cost more to build at about $57 million per megawatt, although they need less floor space than conventional sites. Servers are the biggest single expense at about $31.4 million per megawatt, followed by networking gear at about $4.8 million. Switchgear, power distribution, generators, backup power, chillers and cooling each run between $100,000 and $1.1 million per megawatt.
Why it matters: the cost breakdown shows where the money lands. With servers and networking taking the bulk of each megawatt, chipmakers and server builders, many of them in the US, remain the largest beneficiaries, while power and cooling suppliers capture a smaller but fast-growing share. The forecast comes in a week when chip stocks sold off on doubts over AI returns, so investors will test it against hyperscaler capital-spending guidance in the coming earnings reports and against the financing strain that a doubling of spending would put on balance sheets and credit markets.