AI drives data centre surge to $387 billion by end of 2025

M Capital Group has released new research forecasting significant structural changes in the global data centre sector, driven by artificial intelligence, government regulation and emerging infrastructure demands.

The report, titled "Data Centres – Breathtaking Drive: Exhausting Energy, Water and Brains", outlines how the industry is responding to the rising importance of digital sovereignty, national security strategies and AI-enabled computing.

Market projections

According to M Capital Group, the worldwide data centre industry is expected to reach a value of $387 billion by the end of 2025. Hyperscale operators and sovereign-backed providers are investing heavily in AI-ready facilities to support the increasingly complex computing requirements of trillion-parameter models.

The research projects that AI workloads alone could account for as much as 50% of all global data centre electricity usage by the close of 2025. In response, the sector is advancing liquid cooling technologies, designing more power-dense racks, and constructing infrastructures that comply with regulatory demands for sovereignty and security.

Sovereign data mandates

An important factor noted by the report is the proliferation of data localisation laws worldwide. The research notes that more than 60 countries are now imposing strict requirements on how and where data is stored and processed. As a consequence, data centre operators have been compelled to redesign their networks with regional compliance, air-gap security systems and integration with national fibre backbones in mind.

Infrastructure investment shifts

M Capital Group forecasts over $280 billion in hyperscaler capital expenditure devoted to AI infrastructure globally before the end of 2026. Major technology entities such as Microsoft, Google and Amazon are highlighted in the report, along with other independent operators who are shifting resources towards vertically integrated, AI-optimised campuses.

The analysis identifies a notable increase in infrastructure growth in emerging markets including the Middle East, Africa, and Latin America. Governments and private sector partners in countries like Saudi Arabia and France are collaborating to create sovereign-grade data centre facilities. In these jurisdictions, AI infrastructure is seen as integral to broader national strategies for digital and economic security.

Leadership commentary

Christian Mouchbahani, Managing Partner at M Capital Group reflected that: "The AI era will not be cloud-native. It will be infrastructure-native. And those who can localise, optimise, and operationalise at scale will define the next two decades of digital power brains."

M Capital Group positions the changes underway as part of what it describes as "a once-in-a-generation structural realignment, where the physical architecture of intelligence is being redrawn at a global scale."

Challenges facing the sector

The report emphasises the mounting demands on power and water required to operate and cool advanced computing facilities. The scale and pace of AI adoption is pushing data centre operators to rethink energy efficiency, cooling methods and the sourcing of sustainable resources.

These operational and environmental challenges are amplified by the need to secure talent – or, as the report notes, "brains" – with the expertise to manage increasingly complex systems at scale. The interplay between technical innovation, compliance, sustainability and workforce development is highlighted as a defining feature of the sector's evolution in coming years.

Industry implications

The research notes that the convergence of AI adoption, sovereign data rules and infrastructure innovation will have wide-ranging repercussions for technology strategies, investment allocation, and digital policy across markets. The way data centres are planned, located, built and operated is shifting to accommodate these new pressures.

M Capital Group states that operators who are able to adapt quickly to localisation requirements, optimise their technology stacks, and manage vast and distributed campuses efficiently will be best positioned for long-term success as the sector evolves.

The publication of the "Data Centres – Breathtaking Drive: Exhausting Energy, Water and Brains" report comes amid increasing global attention on the role of digital infrastructure in economic development, technological competitiveness and national strategy.