Hyperscalers to eat 61% of global datacenter capacity by decade's end

Cloud and AI demand propel rapid buildout as on-prem share drops to 22%

Hyperscale operators are expected to account for 61 percent of all datacenter capacity by 2030, thanks in part to the growth of cloud services and rising demand for compute to feed AI.

According to data from Synergy Research Group, the growing proportion of capacity accounted for by the likes of AWS, Microsoft and Google isn't due to a decline in on-prem deployment. On-prem is actually still growing on the back of enterprise investment in GPU servers for AI processing, but it is being outpaced by hyperscale expansion.

The trend marks a reversal from 2018, when 56 percent of all bit barn capacity was comprised of on-premises deployment. By the end of this decade, the on-prem share is estimated to shrink to 22 percent, while the hyperscale firms are on track to expand their presence by nine times.

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As the situation stood at the end of last year, hyperscalers – the big three and Meta – made up 44 percent of worldwide bit barn capacity. Another notable change is that half of that figure is now represented by facilities built and owned by the companies themselves, with the balance being leased.

On-prem infrastructure currently accounts for 34 percent of total capacity, with the remaining 22 percent comprising colocation capacity.

Between now and the end of the decade, capacity will continue to rise rapidly, driven primarily by hyperscale capacity growing threefold, Synergy forecasts, though the company refused to share the exact numbers.

Both on-prem and colocation will continue to add capacity over the same period, but in both cases, they will represent a decreasing share of the total as the hyperscale portion inflates relentlessly.

Synergy Research chief analyst John Dinsdale pointed to cloud and other digital services as the drivers of the expansion, with the rush for AI infrastructure giving this a boost.

The makeup of the bit barn capacity mix also differs region by region, he told us.

"Hyperscaler-owned datacenter capacity is much more prevalent in the US than in either the EMEA or APAC regions. Overall though, the trends are all heading in the same direction: all regions will see double-digit annual growth rates in overall datacenter capacity over the forecast period, and all regions will see the hyperscale-owned portion of that capacity growing by at least 20 percent per year."

The unspoken assumption in such predictions, of course, is that the AI hype will continue to drive the investment feeding all this new infrastructure. However, there are those who say there's a risk of the datacenter market overheating, including Digital Realty's European managing director, Fabrice Coquio, and Baidu CEO Robin Li, who described the AI sector as an "inevitable bubble," similar to the dotcom boom-and-bust of the late 1990s. ®