Global data center demand is expected to surge in 2025, despite supply and power constraints, according to a report from JLL.

In 2025, an estimated 10GW is projected to break ground globally, with 7GW reaching completion. The global market will expand at a baseline of 15 percent CAGR through to 2027, potentially even reaching 20 percent.

This comes despite the fact that rapid expansion is outstripping supply and that some markets have seen electricity development constraints.

JLL 2025 Outlook Report
Power grids – JLL

As has been the case for a while now, AI has been cited as the main cause of data center growth and expansion.

The report said that at the core of the AI revolution lies the rapid advancement in semiconductor technology, with GPUs becoming increasingly power-hungry and rack densities ranging from 40kW to 130kW per rack.

Future chips are projected to reach 250kW per rack.

In 2024, WSTS reported that November semiconductor sales totaled $57.8 billion, with growth creating 18 new fabs globally in 2025.

Liquid cooling to become new norm

Liquid cooling is expected to become the new standard for data center developments and immersion cooling is set to become a common solution as GPUs surge past 150kW.

However, the report adds that whilst AI is a driver, it will represent less than 50 percent of data center demand in 2030, with traditional, lower-intensity workloads like data storage and cloud computing making up the rest.

“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 downtime.”

Developers seeking alternative energy sources

With global data center energy demand expected to double over the next five years, developers are now seeking alternative energy solutions.

Having said that, the facilities are only one component of the complex global power challenge, representing around two percent of global electricity in 2025.

The report added that a lot of data centers are clustered together and unevenly distributed across the globe, resulting in some regions where facilities account for a considerable proportion of total electricity demand.

Large-scale nuclear power is emerging as a preferred alternative to traditional power, particularly for AI and high-performance computing applications. Companies worldwide are developing SMRs to offer a modular and scalable green energy source.

Several high-profile data center operators signed SMR supply agreements in 2024, fueling renewed interest in the sector.

Oklo has signed five deals in the sector. Last month, the company partnered with two undisclosed data center providers to deliver up to 750MW of power. This followed previous agreements with Equinix and Prometheus for 500MW and 100MW of nuclear power, respectively. In December, Oklo and data center operator Switch signed a 12-gigawatt non-binding Master Power Agreement.

In October, AWS signed three agreements with Energy Northwest, X-Energy, and Dominion Virginia to support the deployment of more than 600MW of power across Washington and Virginia.

Before this, Google signed a corporate agreement to purchase nuclear energy from multiple SMRs from Karios Power, with an expected deployment date in 2030.

Commercial deployment in the US is unlikely until 2030, said JLL.

Investor appetite to continue growing

Due to power scarcity, attractive returns, and growing excitement around AI, investor appetite for data centers will remain strong 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, US 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.”