AI infrastructure investments are expected to lift data center capex to more than $500 billion by 2027, according to a recent report from Dell’Oro Group, a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks and data center infrastructure markets.

“Despite near-term data center capex growth headwinds as the major cloud service providers and enterprises optimize their infrastructure, forthcoming technology transitions will stimulate long-term growth,” said Baron Fung, senior research director at Dell’Oro Group. “Most notably, the hyperscale cloud service providers will prioritize their investments toward accelerated systems for AI applications for both their public cloud platform and SaaS offerings.”

The July 2023 Data Center IT Capex 5-Year Forecast Report notes worldwide data center capex is forecast to grow 15 percent by 2027; however, near-term cloud and enterprise cape