Data Centre Demand Surges as AI Adoption Outpaces Supply: Jefferies Report
Data centre demand far outpaces supply amid AI acceleration: Report
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A Jefferies report reveals that global demand for data centres is significantly exceeding supply, creating a structural shortage exacerbated by AI adoption. Hyperscaler capital expenditure is projected to reach $770 billion by 2026, while the supply chain struggles to meet the growing demand.
- 01Only 8.9 gigawatts (GW) of data centre capacity became operational in 2025, against a demand of nearly 21.1 GW, resulting in a 12 GW deficit.
- 02Hyperscaler capital expenditure is expected to rise to $770 billion in 2026, a 74% increase from the previous year, nearly five times the $156 billion spent in 2023.
- 03AI-related power demand could reach around 30 GW globally by 2026, with North America alone accounting for nearly 19 GW.
- 04Supply-side bottlenecks include shortages of skilled labor, cooling equipment, and electrical components, hindering new data centre construction.
- 05From 2021 to 2025, the cumulative deficit of undelivered data centre capacity is projected to reach 20.4 GW, likely widening further due to sustained AI demand.
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According to a report by Jefferies, the global demand for data centres is far surpassing supply, leading to a structural shortage that is expected to continue as artificial intelligence (AI) adoption accelerates. In 2025, only 8.9 gigawatts (GW) of capacity became operational, while demand soared to nearly 21.1 GW, creating a deficit of approximately 12 GW. Hyperscalers, including Amazon, Microsoft, Google, and Meta, are projected to increase capital expenditure to $770 billion by 2026, a 74% rise from the previous year. Despite this investment, supply chain limitations, such as labor shortages and equipment availability, are preventing the industry from meeting demand. AI-related power demand is anticipated to reach 30 GW globally by 2026, with North America expected to require nearly 19 GW. This persistent gap between demand and supply is benefiting data centre operators and infrastructure developers, as vacancy rates remain low and rental rates rise. The cumulative deficit of undelivered capacity from 2021 to 2025 is estimated at 20.4 GW, likely to increase as AI continues to drive demand for computing infrastructure.
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The shortage of data centre capacity is leading to increased rental rates and low vacancy rates, benefiting operators and developers.
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