2026 Global Data Center Market Outlook Alixpartners

Bonisiwe Shabane

-Jan 2, 2026, 12:01 PM

2026 global data center market outlook alixpartners

How breakthroughs like DeepSeek will shock data center builds and operations Navigating SE Asia’s data center market: What it takes to win AlixPartners recently surveyed more than 400 senior executives in the data center industry to gain insight into current market trends and identify key strategies to maximize value creation. 400 industry insiders agree that while we are experiencing an AI boom, data center demand and the silicon architecture powering GPUs are about to change. We will soon see distress and M&A across the industry. As AI capabilities scale, we expect a sharp divergence: Companies that get their strategy, integration, and execution right will achieve outsized success, while others—regardless of infrastructure investments or market hype—will fall behind.

Shifting investment priorities, evolving silicon architecture, next-gen energy strategies, and adapting to changing regulations will define the winners of the next chapter. Demand is expected to grow, but volatility looming Find out more about Lexology or get in touch by visiting our About page. Our recently published 2026 Global Data Center Market Outlook polled more than 400 senior executives across the data center industry—including investors, operators, technology providers, and real estate investment trusts (REITs)—to gain insight into current... More than 50 of these executives are located in the Middle East. This article focuses on the unique differences of this region with regard to data center builds and operations in the coming year and beyond.

1. AI growth alignment with global trends The Middle East is fully aligned with global sentiments on AI-driven growth, with 96% believing AI inferencing will influence future market growth. Notably, 66% say AI will "somewhat influence" growth (higher than other regions' "strongly influence" rates), indicating broad consensus but measured enthusiasm. The region also shows strong belief that GPU efficiency improvements will drive a decline in LLM training (53% cite this as the main cause, higher than most markets). Industry leaders surveyed by AlixPartners warn the data center boom could trigger financial strain, Bloomberg reports.

While 86% of approximately 400 respondents expect asset valuations to stay high – thanks to prime locations and building on-site energy capacity – 61% anticipate distress driven by rising energy costs overall, competition and... Respondents also cited mounting debt and supply chain challenges as operators race to meet AI and cloud demand. Analysts say unchecked growth threatens profitability and sustainability despite strong market conditions today. My colleague Andrej Danis recently spoke with Bloomberg on one of the most timely topics shaping AI Infrastructure industry, sharing some key takeaways from our AlixPartners 2026 Data Center Market Outlook. Out of the 400+ senior executives we have surveyed from across the value chain, one of the things that strikes me the most is that 57% of respondents do not have more than 12... Yet demand has never been that strong and capital is flooding.

Considering disruption coming from ultra fast technology cycles, neo clouds, quantum computing and more, inefficiencies and poor cash flow will ultimately bring distress situations in the market, which is confirmed by 61% of respondents. Those who want to stick ought to prepare for the next phase. Read our full report here for more insights: https://lnkd.in/ekZr42Ey #DigitalInfrastructure #AlixPartners #Datacenters #AI Klaus Hoelbling John Miles Stuart Cockburn Giacomo ("Jake") Cantu Sudeep Suman Alexander Fischer Christian Luetkhoff Sanjay Verma Lancelot Sursock Catherine Sherwin... Americas Telecommunication Lead, Partner & Managing Director at AlixPartners | Expert in performance improvement Today, we launched our AlixPartners 2026 Data Center Market Outlook. Our survey of 400+ senior executives reveals a striking paradox: 86% expect data center valuations to remain high, yet 61% anticipate industry distress ahead.

As I discussed with Reshmi Basu at Bloomberg, with Meta's recent $30 billion bond drawing record $125 billion in orders, capital is flooding into AI infrastructure. But I note: "There will be winners, but there will also be those who overwhelm themselves. Data centers require a lot of money and at some point, investors will want to see results from returns on their investment." The risks are real—rising energy costs, supply chain constraints, and mounting questions... The winners will balance growth ambitions with disciplined capital allocation. Check out the Bloomberg article below and read our report: https://lnkd.in/evYNGh-e There is a ton of noise and hype right now around AI infrastructure, but underneath all of that is a real and lasting transformation.

The 2026 Data Center Market Outlook from AlixPartners - built on feedback from over 400 industry executives, cuts through the hype and looks at what's actually changing, why it matters, and how value will... https://lnkd.in/g4ZNyRcY Global Data Centre (Data Centers) market size is estimated at USD 412006.29 million in 2026 and expected to rise to USD 1029636.38 million by 2035, experiencing a CAGR of 10.71%. The Data Centre (Data Centers) Market represents a critical digital infrastructure segment supporting more than 95% of global enterprise workloads through centralized and distributed computing environments. Globally, over 8,000 operational data centers were recorded in 2024, with rack densities ranging between 6 kW and 30 kW per rack. Hyperscale facilities account for approximately 44% of installed IT load capacity, while colocation facilities represent nearly 36% of operational floor space.

Power usage effectiveness levels across modern facilities improved from 1.67 in 2015 to nearly 1.42 in 2024. More than 72% of enterprises rely on hybrid data center models, highlighting sustained demand across the Data Centre (Data Centers) Market Report, Data Centre (Data Centers) Industry Analysis, and Data Centre (Data Centers) Market... The USA Data Centre (Data Centers) Market hosts more than 3,200 operational facilities, accounting for nearly 40% of global data center capacity. Northern Virginia alone supports over 25% of U.S. hyperscale workloads, with average facility sizes exceeding 50 MW per campus. More than 68% of U.S.

enterprises operate multi-cloud architectures integrated with physical data centers. Power consumption from U.S. data centers represents approximately 4.2% of national electricity usage, while renewable energy sourcing exceeds 55% across large operators. Server density averages 8.5 kW per rack, reinforcing the strategic position of the U.S. in the Data Centre (Data Centers) Market Analysis and Data Centre (Data Centers) Market Outlook. Download FREE Sample to learn more about this report.

The Data Centre (Data Centers) Market Trends demonstrate accelerated infrastructure modernization driven by AI, cloud, and automation adoption. AI-ready infrastructure is incorporated in over 64% of new data center builds, while GPU-based server deployments increased by nearly 67% across hyperscale environments. Average rack power density rose from 7 kW to 12 kW between 2020 and 2024, with high-performance zones exceeding 20 kW per rack. Modular data center adoption expanded by approximately 49%, reducing construction timelines by nearly 32% and lowering deployment risk by 28%. Track innovations, defense spending, and aerospace advancements shaping global security strategies. Understand crop production, agri-tech adoption, and global demand driving sustainable farming practices.

Explore mobility trends, electric vehicles, and logistics shaping the automotive transportation industry. Uncover fintech innovations, risk management, and evolving customer expectations in BFSI markets. Analyze outsourcing, consulting, and digital transformation strategies across global business services. Lead the conversation for the year ahead in the data center sector To help data center decision-makers navigate ongoing disruption, our Trends and Outlooks series offer actionable insights into the defining trends and challenges of the past year – while also exploring what 2026 may hold... Download our 2026 Trends and Outlooks guide now to find out more on how you can lead the conversation for the year ahead, including topics such as:

The global data center market size was estimated at USD 383.82 billion in 2025 and is anticipated to reach USD 902.19 billion by 2033, growing at a CAGR of 11.3% from 2026 to 2033,... The market is undergoing rapid transformation as enterprises, governments, and hyperscale cloud providers aggressively expand digital infrastructure to support the exponential rise in data generation, artificial intelligence (AI) workloads, and cloud-based applications. The rapid shift toward cloud computing, as enterprises increasingly adopt public, private, and hybrid cloud models to enhance scalability, reduce capital expenditure, and improve operational efficiency. Organizations are moving critical applications, workloads, and data to cloud platforms to gain flexibility, faster deployment, and better resource optimization. This widespread adoption has compelled major hyperscalers such as Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba Cloud to aggressively expand their global regions and availability zones to meet rising demand. These expansions support low-latency access, improved redundancy, local data sovereignty compliance, and greater service availability across industries.

As more businesses embrace digital transformation, cloud-first strategies continue to accelerate the construction of hyperscale data centers worldwide, reinforcing cloud computing as a central catalyst for market growth. Moreover, the proliferation of edge computing is significantly contributing to the growth of the data center industry. As the volume of data generated by IoT devices and real-time applications increases, there is a growing need for low-latency processing. Edge data centers located closer to the source of data generation reduce latency and improve application performance. This trend is particularly prominent in sectors such as autonomous vehicles, healthcare, and smart cities, where real-time data processing is critical. Sustainability initiatives are also playing a pivotal role in driving growth in the data center market.

Operators are prioritizing energy-efficient designs, renewable energy adoption, and next-generation cooling systems to minimize environmental impact. Governments and regulatory authorities are also pushing for greener data center practices, accelerating investment in sustainable infrastructure. Meanwhile, continuous technological advancements, such as liquid cooling, AI-driven management systems, and modular data center architectures, are significantly improving performance while reducing operational costs. These innovations are motivating enterprises to upgrade and modernize their data environments, further supporting the expansion of the overall market. The hardware segment accounted for the largest market share of over 67.0% in 2025 in the data center market. The rising demand for high-performance computing (HPC) and AI workloads is a major driver of growth in the data center hardware segment.

AI training, machine learning, and complex computational tasks require powerful GPUs and accelerator-based servers that can handle extremely high processing loads. These applications also require high-density racks, ultra-fast NVMe storage, and advanced networking technologies, such as 100G, 400G, and increasingly 800G Ethernet, to support rapid data transfer. As workloads intensify, data centers must adopt more energy-efficient cooling systems to manage the heat generated by dense compute environments. This shift toward performance-driven infrastructure is accelerating investments in next-generation servers, networking gear, and cooling hardware.

2026 Global Data Center Market Outlook Alixpartners

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