At the core of the AI revolution is the rapid advancement in semi-conductor technology. Over the past two years, GPUs have become substantially more powerful, leading to higher rack densities ranging from 40 kW to 130 kW per rack, with future chips projected to reach an astounding 250 kW per rack.

GPU innovation presents a significant hurdle: managing the heat generated by densely packed, energy-intensive GPUs. The necessity to keep this tech cooled and load variability stable, combined with new power usage effectiveness (PUE) regulations, will shift thermal management strategies toward liquid cooling as the standard for new data center developments. In the future, immersion cooling will become a common solution as GPUs surge past 150 kW.

Most new data centers are being designed to house a combination of both AI and traditional workloads. Though a significant driver, even optimistic adoption scenarios suggest that AI will represent less than 50% of data center demand in 2030, with traditional, lower-intensity workloads like data storage and cloud-based applications comprising most of the demand.

“While not every data center is or will be a specialized AI facility, all data centers – new and existing – can benefit from more energy efficient operations and improved technology integration,” said Andrew Green, JLL Regional Data Center Practice Lead, Asia Pacific. “Data center operators must contend with the demand for massive power needs while satisfying the need for more energy efficient facilities. AI is transforming data center management through predictive maintenance applications, which optimize energy usage, lead to longer lifespans for equipment and result in less down time.”

Investor appetite for data centers will remain strong through 2025 due to demand for compute power and data storage, low supply due to power scarcity, attractive returns and growing excitement around AI’s potential. JLL anticipates data center development financing will have another record year in 2025, while global data center trading volume is likely to moderately increase in 2025.

“Data center activity has exploded over the last few years, with much of the demand geared toward single-tenant ground-up construction,” said Carl Beardsley, U.S. Data Center Leader, JLL Capital Markets. “Significant barriers to entry exist for new investors based on the amount of capital required as well as a longer development cycle. In 2025, we expect many opportunities for core investors to recapitalize the single-tenant data centers that continue to be built.”

M&A investment volume and megamergers will likely slow, but JLL expects an increase in joint ventures in 2025, particularly in developing countries as industry firms partner with regional groups to help navigate the local political, regulatory and business landscapes.

Despite challenges, including supply constraints and electricity limitations in some markets, the outlook for the data center sector remains highly favorable. The industry is poised for continued growth, driven by AI adoption, increased data processing demands and ongoing technological advancements.

Your data has never been more critical, and neither has your data center partner. From site selection and land acquisition to upgrades and facilities and energy management, JLL’s team of dedicated technical experts are trained and experienced in every phase of the data center lifecycle to help you scale, optimize and maintain efficiencies in your data center strategy. Our solutions enable your business to make higher-quality decisions and enter new markets with reduced friction through local market expertise, business intelligence, proprietary data and cutting-edge technology tools. To learn more, visit here.

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