Andrew Schaap is CEO and Board Member of Aligned Data Centers.
Think the past year was a busy one for the data center industry? Spoiler alert: Expect more of the same in 2025, with a few twists.
As the digital backbone of the economy, data center providers had their foot on the gas in 2024 as we raced to meet unprecedented demand. Worldwide, the data center market is expected to triple in size by 2034, from $256 billion to roughly $776 billion.
Feeding that appetite has pushed companies like ours to be nimble, adaptable and innovative. Working in this fast-paced industry is like building a plane while flying it—while also constructing the runway and the hangar.
As it did in 2024, AI will drive growth in the coming year. Demand for AI-ready data center capacity is expected to climb at an average of 33% annually from 2023 through 2030. By then, about 70% of demand will be for data centers that can host advanced AI. In this next stage of AI expansion, companies with the infrastructure, technology and team ready to support the highest-density GPUs will set themselves apart. The ability to quickly pivot to meet evolving customer needs will be key too, along with being a trusted technology partner.
Although AI is the most significant force defining the data center industry in 2025, here are five other trends that will make a big impact.
1. Public perception of data centers keeps evolving.
The more people learn about data centers, the more they discover what a vital service the industry provides. That awareness will only keep growing in 2025.
Just look to the U.K., which recently joined the U.S. and several other countries in recognizing data centers as critical infrastructure. It’s a sign that governments and the public may finally be starting to get it. People are also realizing that AI-powered advances—such as early disease detection, autonomous vehicles, accelerated scientific discovery and better climate modeling—aren’t possible without data centers.
At the same time, data center providers must continue to be mindful of their impact on the communities where they operate. We’ve seen that those intent on being good neighbors—by listening to communities, joining forces with local organizations and creating employment opportunities—should find themselves better received.
Looking ahead, I hope our industry gains broad public acceptance. To pick up on the aviation analogy, data centers will soon be regarded like airports—an essential service that keeps the economy moving.
2. Sustainability is table stakes.
For the data center industry, the steep environmental costs of building all the new facilities needed to meet customer demand will make sustainability even more important in 2025. Clients, investors, regulators and the public are watching.
The sustainability imperative extends well beyond innovations like liquid cooling technology that requires less power and water. Other difference-makers include more energy-efficient electrical infrastructure and modular construction, which uses fewer building materials and helps shrink carbon emissions.
We aim to bake sustainability into every aspect of data center operations, whether it’s waste management or reclamation of brownfield sites for new facilities. Providers are also looking at clean, renewable energy from wind and other sources. Some major players have already invested in nuclear power.
3. Demand for talent remains sky-high.
In 2025, data centers won’t find it any easier to source the talent they need. The industry faces a persistent labor crunch, with six out of 10 companies finding it tough to hire qualified candidates. Roughly the same share has trouble retaining staff. With demand for full-time data center employees set to reach about 2.3 million in 2025—a gain of 300,000 since 2019—competition is fierce.
The best defense? Finding creative ways to attract and retain the right people. That means building a culture that gives employees a sense of purpose and helps develop their talents. Companies like ours have seen success with reskilling capable folks from the military and other sectors. Another potential route: recruiting offshore talent via temporary work visas.
To keep good people around, data centers must also offer internal promotions and other growth opportunities. Supplying the workers of tomorrow means encouraging colleges and trade schools to offer data center-focused degrees and training programs too. We’ve played an advisory role in such a program, but more are needed.
4. Latin America helps drive global data center expansion.
Data center providers will keep expanding internationally in 2025 as U.S. capacity reaches its limit. One fast-growing region is Latin America, which offers a less crowded competitive landscape than Asia-Pacific and Europe. As of 2023, LatAm had attracted $6.36 billion in data center investment, with spending expected to top $10 billion by 2029. Brazil leads the way with more than 40% market share, followed by Mexico, Chile, Colombia and Argentina.
Home to some exceptional talent, LatAm comes with its challenges like any other market. During our own expansion, we’ve navigated them with good local partners, which are essential for anyone considering a move into the region.
5. Innovation comes to business processes.
When it comes to data center innovation, the first thing that often springs to mind is shiny new tech. But I expect to see providers innovate in less cutting-edge but equally impactful areas, such as winning regulatory approvals and securing building permits faster. Essentially, it’s about applying new methods to old industry standards.
Here, AI could play a key role. Data center providers are testing digital assistants that let them securely upload all of their contracts and other documents, then ask questions and receive answers in plain language. One potential use: pinpointing regulatory and other roadblocks to projects.
Of course, this is just a sampling of the trends influencing the industry in 2025. Expect colocation to loom large, along with scalability for existing facilities.
My prediction for 2025? The data center providers best positioned for success will find innovative ways to keep customers, employees and investors happy—while also building public trust by consulting with communities and delivering on sustainability. Now, buckle up for another blockbuster year.
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