Data Center Rundown: March 2025

27 March 2025

Welcome to the Data Center Rundown for March 2025! Spring is officially in the air (finally), and while the daffodils are popping up outside, the data center world has been heating up too. This month brought a wave of bold moves from tech giants, massive infrastructure investments, and more than a few eyebrow-raising headlines.

So, let’s get into it – here’s (almost) everything you need to know from a jam-packed March in the data center space.

What to expect:

• Alibaba warns of AI data center bubble

• Segro plans £1bn AI-powered London data center

• Texas data center capacity quadruples since 2020

• Oracle launches $10bn expansion initiative

• Electrician shortage threatens AI infrastructure

• And so much more!

Let’s dive into March's data center rundown.

Alibaba's Concerns Over AI Data Center Bubble

Joe Tsai, chairman of Alibaba Group, has expressed concerns about a potential over-provisioning of data center construction for AI. Speaking at the HSBC Global Investment Summit, Tsai warned that the current pace of development might surpass initial demand for AI services, suggesting a more measured approach to expansion.

UAE and US Forge $25 Billion Data Center Power Partnership

Abu Dhabi's wealth fund, ADQ, and U.S.-based Energy Capital Partners (ECP) have announced a 50-50 partnership to invest over $25bn in projects aimed at powering data centers and other industrial consumers. This initiative seeks to develop 25 gigawatts (GW) of power capacity, focusing on establishing new gas-fired generation facilities co-located with data centers, operating independently from wider power grids. The first projects are anticipated to come online in about three years.

Global Data Center Investments Reach $455Bn in 2024

A report by Dell’Oro Group reveals that global investments in data centers surged 51% year-over-year in 2024, totaling $455bn. This growth is largely attributed to cloud vendor capacity expansions and the escalating demand for AI and cloud services. The analysis projects an additional 30% increase in infrastructure capital expenditures for 2025.

CoreWeave's IPO Raises Eyebrows

CoreWeave, a company that began as a side project by hedge fund traders in 2017, is making headlines with its ambitious IPO plans. Aiming to raise $2.7bn at a valuation of $32bn, the company faces scrutiny over its $8bn debt and complex financial relationships with major players like Nvidia and Microsoft. Investors are watching closely as CoreWeave navigates these financial intricacies.

London's £1bn Data Center Development

Segro, the UK's largest listed landlord, has partnered with Pure Data Centres, backed by Oaktree Capital Management, to develop a £1bn data center in Park Royal, west London. This 30,000 sq m, three-story facility marks Segro's first fully fitted data center, reflecting the growing demand driven by artificial intelligence. Completion is expected by 2029, with anticipation of securing a major hyperscaler tenant.

Vertiv Faces Demand Fluctuations

Vertiv Holdings, a key supplier of data center cooling systems, is experiencing a slowdown in orders from hyperscalers like Microsoft and Google. This dip is attributed to data center redesigns aimed at accommodating more power-intensive equipment, causing temporary delays in procurement. Analysts remain cautiously optimistic, maintaining a "Buy" rating but adjusting price targets in light of these developments.

Nvidia Unveils Photonics Networking Gear

At GTC 2025, Nvidia introduced advanced networking technologies incorporating silicon photonics into their Quantum InfiniBand and Spectrum Ethernet switches. These innovations aim to enhance AI data centers by reducing energy consumption and costs, supporting up to 1.6 Tbps per port and enabling connections among millions of GPUs. The Quantum 3450-LD InfiniBand switch is expected in late 2025, with Ethernet switches to follow in 2026.

Texas Data Center Boom Continues

The growth of data centers in San Antonio and Austin is accelerating, led by companies like Microsoft. Since 2020, power consumption has quadrupled, with 646 megawatts built, 664 MW under construction, and 1,229 MW planned. This surge, driven by increasing AI and cloud service demands, is prompting utilities to invest heavily in expanding transmission and generation projects to meet the rising power needs.

Saudi Arabia's $5Bn Net-Zero AI Data Center

DataVolt, a Saudi Arabian data center developer, is investing $5bn in a net-zero AI data center campus to support Neom, the futuristic city envisioned as part of Saudi Arabia’s Vision 2030 project. This initiative underscores the Kingdom's commitment to diversifying its economy and reducing reliance on fossil fuels.

Oracle's $10Bn Data Center Expansion

Oracle has unveiled plans for a $10bn expansion of its data center infrastructure. This ambitious initiative aims to bolster Oracle's cloud services and meet the growing demand for data storage and processing capabilities.

Energy Executives Warn of Electrician Shortage

At the CERAWeek conference in Houston, energy executives highlighted a critical shortage of electricians, which could hinder the expansion of AI data centers. With tech giants investing heavily in AI infrastructure, the demand for skilled electricians is outpacing supply, potentially leading to project delays and increased costs.

Hyperscale Data Center Market Poised for Growth

Finally, a recent report forecasts the hyperscale data center market to exceed $608 billion by 2030. Key trends influencing this growth include advancements in AI, increased data consumption, and substantial investments from major tech companies.

That's a wrap for March 2025! The data center industry continues to evolve at a rapid pace, balancing ambitious growth with strategic recalibrations. Stay tuned for next month's rundown as we keep you informed on the latest developments shaping our digital infrastructure.

In the meantime, don’t miss our upcoming webinar — Plan. Build. Deliver: The Platform That’s Changing Construction. We’ll be diving into how cutting-edge tools are revolutionizing data center development from the ground up.

Save your spot here: Register now 👈