2025 Global Data Center Outlook: Shaping Tomorrow's Digital Infrastructure
- Chakrapan Pawangkarat
- Jul 3, 2025
- 3 min read
Chakrapan Pawangkarat
Co-Head of Property and Asset Management, JLL Thailand
3 July 2025
According to JLL's 2025 Global Data Center Outlook report, the data center sector is continuing its phenomenal growth trajectory with a projected 15% CAGR through 2027, with potential upside reaching 20%. This expansion is driven primarily by technological innovations, particularly artificial intelligence, while facing significant challenges including power constraints and demand outstripping supply.
Artificial Intelligence Transforms the Landscape
AI applications are rapidly expanding across industries including healthcare, financial services, transportation, and manufacturing. Billions in AI investments are driving demand for more powerful and efficient data center infrastructure, pushing global construction to record levels.
The advancement in GPU technology is revolutionizing facility design, with rack densities increasing dramatically. NVIDIA's transition from 7nm H100 chips (41kW rack density) to 5nm GB200 chips (130kW) demonstrates this trend, with future 2nm chips projected to reach 250kW per rack.
Power demands for AI training facilities are enormous, often requiring 1 gigawatt or more - equivalent to powering 800,000 U.S. homes annually. This has created a decoupling between AI training facilities (built near power sources) and inference facilities (located closer to population centers for lower latency).
Power Grid Challenges and Solutions
While data centers receive significant media attention regarding power consumption, they will represent only about 2% of global electricity consumption in 2025. The projected increase in data center electricity demand through 2030 is less than a third of the increased electricity needed for both electric vehicles and air conditioning.
However, data centers tend to cluster geographically, creating significant power delivery bottlenecks. In some regions, they account for substantial portions of electricity consumption - 7% in Singapore, 21% in Ireland, and 26% in Virginia.
Power transmission challenges are intensifying, with new high-capacity lines often taking four years or more to extend to development sites. This has shifted site selection criteria toward available power capacity and proximity to transmission lines.
Nuclear Power and Small Modular Reactors
Nuclear power is emerging as a preferred solution, providing both reliable energy and helping meet aggressive net-zero targets. Small modular reactors (SMRs) generating 1.5 to 300 megawatts are particularly promising for data centers.
Commercial SMR deployment isn't expected until 2030 at the earliest, but several agreements between SMR companies and data center operators were secured in 2024. According to the report, 2025 will likely see an acceleration of SMR announcements, with committed gigawatts likely to double.
Liquid Cooling Adoption Accelerates
As rack densities increase, liquid cooling is becoming essential. A hybrid approach is typically employed today (70% liquid, 30% air cooling), with liquid cooling taking the form of rear door heat exchangers and direct-to-chip technologies.
Liquid cooling infrastructure has quickly become a default in new construction and offers a viable solution for existing facilities transitioning to higher-density workloads. Immersion cooling will likely become more common as GPUs push above 150kW per rack, though broad implementation remains a few years away.
Capital Markets Outlook
Investor conviction in data centers will remain strong through 2025, driven by exponential demand, constrained supply, attractive returns, and excitement around AI. An estimated 10GW is projected to break ground globally in 2025, with approximately $170 billion in asset value requiring financing.
Private equity will continue playing a significant role in development financing, while global M&A activity is expected to slow as major developers focus on organic growth and bolt-on acquisitions. Investment sales volume will likely see only modest increases due to continued bid-ask spreads.
Despite concerns about obsolescence, data centers will maintain their value over time with proper investment. The majority of a data center's value lies in its power supply and infrastructure, which remain valuable assets in an increasingly power-constrained environment.
