A market whose growth is virtually guaranteed
Data centers, already booming, have been given a boost by the advent of artificial intelligence. The industry's current challenge is both to open new ones and to add more computing power to existing infrastructures.
Bank of America estimates that CAPEX (capital expenditure) will reach $215 billion by 2023, 74% of which will be spent on IT (servers, networks and storage) and 26% on infrastructure (civil engineering, electricity, air conditioning, power generation and engineering). Sector growth (measured in electrical capacity) averaged 18% over 2018 / 2023, and is set to accelerate. This is all the more true given that AI chips currently require 3 to 4 times more energy than traditional units. A factor for growth, but also a limiting factor: the electrical capacity of networks and means of cooling.
Data centers come in all sizes, from less than 1 MW to over 100 MW. The main ones can be concentrated in specific areas. This is the case in Northern Virginia, home to the highest concentration of servers in the world. At the end of 2023, it was estimated at 2,552 MW, in particular because Amazon has installed the servers of its AWS subsidiary there. By comparison, the Paris region has only 391 MW of installed capacity.
Behind Amazon, the world's biggest data center operators are, in order, Microsoft, Google, Meta, Equinix and Digital Realty. The leading non-American operators are NTT (Japan) and GDS Holdings (China).
What professions are represented in a data center?
This is the graphic representation produced by BofA, followed by a summary table. First of all, it's worth pointing out that infrastructure is divided into 11 different expense items, and requires an average of $38 million per megawatt (MW), according to the bank's specialists. This price applies to the United States. Added to this are wide variations in server prices, meaning that AI-focused data centers, which call on the most expensive servers, are likely to have higher costs per MW. On this basis, replicating the capacity installed in Virginia would mean investing... $97 billion!
Contents of a data center (Source & Design Bank of America Research)
The biggest CAPEX outlays are made by server suppliers (Dell, Hewlett Packard...), who in turn have to buy from companies like Nvidia and other chip and chip system manufacturers. However, a third of the market is in the hands of major players such as Google or Amazon, who produce their own servers. A server has a median price of 7,000 USD, but the most sophisticated can go up to 100,000 USD each, BofA points out.
Exposed companies cited in the article or in the BofA study:
IBM, Lenovo Group Limited, Super Micro Computer, Inc, Siemens AG, Legrand, Modine Manufacturing, Daikin Industries, Ltd, Carrier Global Corporation, Trane Technologies PLC, Johnson Controls, Ebara Corporation, SPX Technologies, Inc, Rolls-Royce Holdings PLC, Cummins Inc, Caterpillar Inc, Eaton Corporation PLC, Vertiv Holdings Co, ABB Ltd, Juniper Networks, Inc, Arista Networks, Inc, Cisco Systems, Inc, Inspur Electronic, WSP Global Inc, Jacobs Solutions Inc, Alphabet Inc, Amazon.com, Inc, Dell Technologies Inc, Schneider Electric SE.