The Data Center Rundown: April

25 April 2024

Q1 2024 concluded on a high note for the data center industry, marked by substantial investments worldwide. As 2024 continues, the spotlight remains firmly on data centers, continuing to make headlines. Without further ado, let's dive into the fourth instalment of our monthly series and explore the significant developments shaping the data center landscape in April.

Top data center news for April

Hyperscale data center capacity to double every four years

We know data center demand is on the rise, and now according to a report from Synergy Research Group, the capacity of hyperscale data centers around the world has doubled in the last four years. This momentum is expected to continue, with the company revealing this growth rate will continue through the next decade amid high demand for cloud services and AI tools.

According to Synergy Research Group, the global count of active hyperscale data centers reached 992 by the close of 2023 and has now exceeded the 1,000 mark. The projection suggests a steady growth trajectory, with an estimated 120 to 130 new hyperscale data centers anticipated to become operational annually over the forthcoming ten years.

Currently, there are approximately 440 hyperscale data centers in various stages of development. This data is derived from a comprehensive analysis of the expansive data center footprints maintained by 19 of the leading cloud and internet service firms.

Microsoft doubles DC capacity

Keeping on the capacity theme, leaked documents reveal Microsoft is allegedly ramping up its investment in data centers and now has more than 5GW of capacity at its disposal.

The leaked document reportedly reveals that Microsoft has expanded its data center capacity significantly, securing an additional 500 megawatts (MW) since July 2023. As a result, the tech giant’s total available IT capacity now exceeds 5 gigawatts (GW).

The document in question appears to be extracted from a confidential presentation crafted by Microsoft’s Cloud and Innovation team earlier in the year.

Oracle to invest over $8bn in Japan

Oracle has announced an ambitious investment plan of over $8 billion in Japan over the next ten years. The focus of this investment is to cater to the escalating demands for cloud computing and AI infrastructure.

Oracle’s strategic expansion will span across Japan, encompassing various initiatives. These include supporting Japanese engineering teams in navigating digital sovereignty requirements and bolstering customer support within its cloud regions in Tokyo and Osaka.

Ultimately, Oracle aims to empower both governments and businesses by facilitating the seamless migration of their mission-critical workloads to the Oracle Cloud platform.

Microsoft also bets on Japan

More news on Japan, as Microsoft says it will spend $2.9bn building out data center capacity in the country over the next year, the company’s president Brad Smith, has said.

The move aligns with the Japanese government’s efforts to enhance the nation’s compute capabilities, particularly in light of the AI landscape.

Smith emphasized the critical role of AI and compute power as a national priority worldwide. The investment will enable Microsoft to deploy servers equipped with AI chips at its two cloud data centers in Japan – Azure Japan East and West – enabling the delivery of advanced AI-enabled services.

Additionally, Microsoft Research will establish a new lab in Tokyo focused on AI and robotics research.

Equinix & PGIM form second joint venture

Equinix forms a second joint venture (JV) with PGIM Real Estate to develop a hyperscale data center in Silicon Valley, California. The $600 million investment aims to expand Equinix’s xScale hyperscale platform into the country.

The two-story facility, named SV12x, will be constructed in two phases, ultimately providing 28MW of IT capacity upon completion. The first phase is scheduled for Q2 2024.

Situated at Equinix’s Great Oaks campus, SV12x will complement the company’s existing four data centers in Silicon Valley.

Under the agreement, PGIM will hold an 80% equity stake in the joint venture, with the remaining ownership belonging to Equinix.

Colt to double West London DC

London DC development goes from strength to strength with Colt DCS poised to significantly expand its data center campus in Hayes, West London, effectively doubling its size with the acquisition of additional land. This strategic expansion positions the campus as the largest within Colt DCS’s international portfolio.

The company emphasizes that this development will elevate the site to one of the UK’s most substantial data center locations and mark it as Colt DCS’s most extensive multi-building data center campus worldwide.

In a pivotal move, Colt DCS has also secured a renewable energy source to power the new site, ensuring it meets the increasing demand for large-scale, high-density AI workloads with sustainable energy solutions.

Stack & EdgeConnex secure sustainability financing

EdgeConneX secures $1.9bn in sustainability-linked financing for its EMEA expansion. This financing marks a shift from stand-alone project-based funding to a more robust structured corporate debt package, consolidating EdgeConneX’s portfolio across the EMEA region.

The transaction enhances the company’s financial flexibility, enabling it to support projected growth throughout the region. Notably, the interest rate is tied to sustainability objectives. EdgeConneX aims to achieve carbon neutrality, eliminate waste and water footprint, and power all its data centers with renewable energy sources by 2030.

Stack Infrastructure also recently secured $3.3bn in green financing for its data center development initiatives.

While the company has not disclosed the specific collateral for these loans, it signifies a significant investment in sustainable infrastructure.

Stack Infrastructure recently commenced construction on its Silicon Valley expansion, earmarking $1.4bn for the site’s development, with a focus on water and energy-efficient digital infrastructure.

Additionally, an allocation of $750 million has been directed toward cooling solutions, green infrastructure, and the use of recycled steel in Loudoun County, Virginia.

“Our top priority is to assist our clients in meeting their sustainability targets with the speed, scale, and certainty required to deliver efficient, AI-ready capacity,” said Brian Cox, CEO of Stack Americas.

$3bn Michigan DC project proposed

And, last but by no means least, a $3bn data center project is being reportedly proposed in Benton Township, Michigan, according to ABC57 and the Herald-Palladium.

An unnamed company intends to build an ‘AI data center’ on 280 acres near Lake Michigan College along Yore Avenue.

While further details remain undisclosed at this time, the project’s potential impact on the area is significant. With access to ample electricity from the Cook Plant and the soon-to-be-reopened Palisades nuclear power plant, as well as available water for cooling and abundant space, the site presents an attractive opportunity for the industry.

Michigan State Representative Joey Andrews expressed hope that this project will be one of many, contributing to the region’s growth.

That wraps up the April edition of our DC rundown. With May on the horizon, I expect another month filled with action. Be sure to circle back this time next month for the latest highlights. Meanwhile, delve into insights from our Founder & CEO on how the construction industry is gearing up to meet the soaring demand for data centers fueled by AI: https://www.xyzreality.com/resources/will-construction-meet-ai-demand-for-data-centers