US data centre spending seen more than doubling to $2.1 trillion by 2028, estimates BoFA

ETMarkets.com

Data centre spending has emerged as a fast growing source of revenue for industrial companies that make generators, construction equipment, switchgear and chillers.

AI drives data centre expansion

The data centre market, valued at $275 billion in 2022, could reach $2.93 trillion by 2030, BofA said. AI is expected to drive the expansion, fuelling a 37% market wide compound annual growth rate from 2025 to 2030, the brokerage estimated.

Chipmakers and server developers have been among the biggest beneficiaries of the AI driven data centre buildout, particularly in the US, according to Reuters.

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Servers account for biggest share of costs

BofA estimated data centre construction costs at $49 million per megawatt, with IT related expenses accounting for 78% of total spending. Neoclouds, or AI focused data centres, cost about $57 million per megawatt but require less space than traditional facilities, Reuters reported.

Servers are the most expensive component at $31.4 million per megawatt, followed by networking at $4.8 million per megawatt, according to the brokerage.

Most other functions, including switchgear, power distribution, generators, backup power, chillers and cooling, cost between $100,000 and $1.1 million per megawatt, Reuters reported.