The data center sector is experiencing significant growth, primarily driven by the increasing adoption of cloud computing, digital transformation initiatives, and AI-enhanced operations. This surge in demand is leading to a heightened need for scalable, high-performance, and energy-efficient data infrastructure.
According to recent data, the market was valued at USD 295.16 billion in 2025 and is anticipated to reach USD 712 billion by 2033, reflecting a compound annual growth rate (CAGR) of 11.66% from 2026 to 2033. Various industries are pushing for high-performance computing and cloud services, which are key factors contributing to this market expansion.
In the United States, the data center market is projected to grow from USD 85.89 billion in 2025 to USD 202.96 billion by 2033, with a CAGR of 11.37% during the same period. The requirements for big data analytics and high-performance storage solutions are expected to drive this growth, along with a rising interest in colocation and hyperscale centers, enabling businesses to efficiently scale their operations.
Market Segmentation Insights
Hyperscale data centers currently dominate the market, capturing a 46.5% share in 2025. This is largely attributed to the rapid development of cloud services, AI, and big data analytics, which necessitate vast computing resources. Major technology companies are investing heavily in hyperscale facilities to accommodate global digital infrastructure demands.
Colocation data centers represent the fastest-growing segment, with a projected CAGR of 12.3% from 2026 to 2033. This growth is driven by enterprises seeking flexible, cost-efficient, and secure shared infrastructure to lower capital expenditures and facilitate hybrid IT deployment strategies.
In terms of components, servers led the market with a 38.6% share in 2025. The demand for efficient and powerful server systems is being propelled by high-performance computing, AI workloads, and virtualization. Meanwhile, networking equipment is the fastest-growing category, expected to expand at a CAGR of 11.4% from 2026 to 2033, due to rising demands for advanced connectivity solutions and enhanced data center performance.
Regional and Industry Trends
The North American data center market holds the largest share, accounting for approximately 41.50% of the total market. This region is recognized as the leading hub for cloud and hyperscale technology, with numerous large companies owning data centers in the area. Conversely, the Asia Pacific region is emerging as the fastest-growing market, projected to grow at a CAGR of 12.29%, spurred by digital transformation and increasing internet usage.
Recent developments include announcements from major players in the industry. In June 2025, Amazon Web Services revealed a USD 100 billion global data center expansion aimed at enhancing its AI infrastructure and supporting next-generation workloads across several regions including the U.S., Europe, and Asia. Additionally, in September 2025, Microsoft disclosed plans to build the world”s most powerful AI data center named “Fairwater” in Wisconsin, USA, which will utilize advanced Nvidia GPUs to bolster its Azure capabilities.
This robust growth trajectory in the data center market highlights the essential role of cloud computing and AI in shaping the future of digital infrastructure.
