Data Center Market Research 2027: Key Trends, Technologies, and Strategic Priorities

How analyst-led research helps cloud providers, infrastructure vendors, and investors make smarter decisions around AI data center build-out.

 

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Key Takeaways

• Data center research is becoming more strategically relevant. With AI workloads expected to overtake legacy workloads by 2031, per ABI Research forecasts, cloud infrastructure decisions are far more complex.
• The market is expanding well beyond traditional hyperscalers. Neoclouds, sovereign cloud providers, and even orbital computing companies are changing where growth comes from.
• For vendors and operators, the challenge is no longer just adding capacity. It’s now essential to understand where workloads are shifting, which regions are tightening control, and how infrastructure requirements are changing.
• Analyst-backed research helps turn fast-moving market signals into clearer decisions on product strategy, investment, partnerships, and expansion.

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Data center research is proving consequential to delivering cloud infrastructure for an increasingly power-hungry world. As Artificial Intelligence (AI) demand continues to soar, reliable and energy-efficient infrastructure sits at the center of global economic discussions.

Governments need data centers for military and national sovereignty purposes. Enterprises need them to meet their digital transformation goals. And consumers use cloud infrastructure for everything from TV streaming to social media.

Research & advisory services not only help data center operators optimize their Go-to-Market (GTM) strategies, but it informs technology vendors of new lucrative growth levers. Sovereign AI requirements are more pronounced in some regions. Emerging service models will shift hardware priorities. And connectivity services tailored to data centers will require infrastructure vendors to step up.

A lot is changing and fast.

Data center technology research is designed to translate industry trends into commercial success. Analyst firms, such as ABI Research, cover a wide market lens to help clients capture new revenue streams and build resilient product roadmaps in a tumultuous era. In this article, we’d like to share our research into data centers, covering the top trends that will define 2027.

 

 

Table of Contents:

Data Center Research Reports

Data Center Research Presentations

Data Center Market Data

Data Center Competitive Benchmarks

 

 

 

What Is Data Center Market Research?

Data center market research is the analyst-led study of next-generation cloud computing infrastructure. The rapidly increasing demand for AI tools across both the consumer and enterprise spaces means data center infrastructure must scale fast to keep pace. Key research topics include the following:

• AI workload capacity
• Data center investment trends
• Data center construction considerations
• Modular data center designs
• Cloud distribution models
• Cooling requirements
• Grid limitations
• Data centers in space

Research provides rich insight into the most influential companies in the data center industry, the transformative technologies enabling scale, and operational best practices. At ABI Research, for example, data center market intelligence is used by cloud service providers, colocation operators, infrastructure vendors, and semiconductor manufacturers.

Data center market research is delivered through several mediums:

• Technology analysis reports
• Market data/forecasts
• Presentation slide decks
• Competitive rankings
• Analyst advisory/consulting

 

 

Data Center Research Reports

 

Neocloud Infrastructure Strategies: Silicon to Servers

 

What Is It?

This research report examines how neocloud providers procure computing infrastructure and differentiate their services. Key companies covered by ABI Research include Nebius, TensorWave, and Massed Compute. The report also explores the factors behind declining Graphics Processing Unit (GPU) instance prices.

A key finding is NVIDIA's dominance in neocloud infrastructure. Strong developer preference has made NVIDIA the leading silicon supplier of compute and networking hardware worldwide. However, many neoclouds are exploring alternatives from AMD and emerging silicon vendors.

The report includes B200 GPU pricing forecasts and examines how sovereign AI initiatives are influencing the market.

 

How Does This Research Support the Data Center Industry?

AI chipmakers and server manufacturers gain insight into neocloud procurement strategies, which are largely driven by customer demand. The findings reveal opportunities for challenger silicon vendors seeking to compete with NVIDIA.

GPU pricing forecasts help investors assess neocloud economics and future market opportunities. Moreover, the company profiles offer competitive intelligence on how emerging cloud providers are positioning themselves.

 

China and Europe Will Lead the Sovereign Cloud Race, but South Korea Will Be the Star

What Is It?

A comprehensive report analyzing sovereign cloud investment trends on the global stage. ABI Research forecasts China will remain the largest market, while Europe will overtake the United States after 2028.

The key takeaway from the research, led by Senior Research Director Dimitris Mavrakis:

“South Korea is by far the most advanced and innovative market for sovereign cloud, especially if we consider a normalized metric, in this case , sovereign data center capacity per capita. This translates to South Korea having the largest appetite to innovate for its citizens and protect its computing borders.”

How Does This Research Support the Data Center Industry?

Cloud providers can use these findings to prioritize regional investments and evaluate opportunities in emerging sovereign cloud markets.

The analysis of South Korea offers unique insight into how national strategies could influence future AI infrastructure demand. Further, technology suppliers can assess which regions offer the best commercial prospects.

On the bureaucratic side, government agencies gain valuable market intelligence on sovereign cloud ownership models and the potential role of private-sector partnerships.

OLS Market Update for Scale-Across Data Center Connectivity

What Is It?

A technology analysis of Open Line Systems (OLS) used to connect distributed AI data centers. ABI Research forecasts the combined U.S. and European scale-across OLS market will grow from US$750 million in 2026 to US$5 billion by 2035.

An important research finding is that the next competitive shift could occur at the orchestration software layer rather than hardware. Ciena, Nokia, and Cisco currently dominate the market, but the low-latency requirements of distributed AI training could create opportunities for new software providers.

How Does This Research Support the Data Center Industry?

It empowers optical networking suppliers to anticipate where OLS demand will grow and adjust their product strategies accordingly. The analysis of hardware disaggregation helps vendors understand where established suppliers retain their competitive advantages.

Data center network planners are better equipped to support emerging orchestration requirements and understand how software-defined control could influence future infrastructure investments.

Data Center Research Presentations

Next Generation Data Centers Market Data Overview

What Is It?

This ABI Research market intelligence presentation examines global data center expansion plans from 2025 to 2035. It includes forecasts for hyperscalers, colocation providers, sovereign clouds, and neoclouds. More than 30 tables and charts detail facility deployments across 5 regions, including operator rankings and capacity breakdowns.

One notable trend is the shift toward larger data centers. ABI Research forecasts the number of facilities exceeding 10 Megawatts (MW) to increase from 5,822 to 8,308 between 2025 and 2035, representing a 3.8% Compound Annual Growth Rate (CAGR). This outpaces smaller facilities as AI workloads drive demand for higher rack densities and greater computing capacity.

How Does This Research Support the Data Center Industry?

Data center operators can use these forecasts to benchmark expansion plans against competitors and identify promising locations for new facilities. The research also reveals how capacity requirements differ across regions, giving infrastructure suppliers a clearer picture of future demand.

For investors, understanding which operators are expanding and where large-scale facilities are gaining ground is essential to evaluating long-term opportunities. The data also support market entry decisions and help cloud providers assess potential partnerships as the industry prepares for another decade of growth.

Orbital Data Center Market Outlook

What Is It?

A research presentation assessing the commercial outlook for Orbital Data Centers (ODCs) through 2035. Led by Principal Analyst Andrew Cavalier, the presentation examines the leading companies developing data center infrastructure in space, their deployment timelines, and the technical challenges affecting market growth.

According to ABI Research forecasts, the ODC market could reach up to 18,600 active satellites and 1.54 effective Gigawatts (GW) of computing capacity by 2035.

The analysis profiles seven companies, including SpaceX Starlink ODC, Starcloud, Blue Origin Project Sunrise, Google Project Suncatcher, ADA Space, Kepler, and Axiom Space. Key topics include investment trends, satellite configurations, and potential applications in defense and Earth Observation (EO).

How Does This Research Support the Data Center Industry?

Cloud providers can use this market intelligence to assess the long-term potential of orbital computing and how it might complement terrestrial data centers. The research also identifies technical barriers that could affect commercial adoption, including cosmic radiation exposure and thermal management.

Investors gain a clearer understanding of which operators are approaching commercial deployment and which remain in early development. Finally, technology providers gain a competitive analysis to gauge potential partnerships and opportunities to support future orbital infrastructure projects.

The Impact of the Storage Shortage on AI Data Center Build-Out

What Is It?

A research analysis examining how memory and storage shortages threaten AI data center expansion through 2027. Our analysts identify supply constraints affecting High-Bandwidth Memory (HBM), Dynamic Random-Access Memory (DRAM), NAND flash, and packaging. The presentation covers the resulting deployment delays, escalating costs, and GPU underutilization.

According to ABI Research, Tier One hyperscalers have a 50% utilization rate, compared to 40% for Tier Two providers, 35% for sovereign cloud providers, and 30% for neoclouds. These gaps are expected to widen as storage bottlenecks intensify.

Three market scenarios are presented, ranging from optimistic to pessimistic, to assess how the shortage could unfold.

How Does This Research Support the Data Center Industry?

Storage shortages are forcing data center operators to reconsider procurement strategies and infrastructure timelines. ABI Research's findings help decision makers identify the most pressing supply chain risks and evaluate ways to reduce their exposure.

Cloud providers can assess how component shortages affect GPU utilization and operating costs. The market outlook also gives investors and Mergers and Acquisitions (M&A) teams a better understanding of which data center operator types face the greatest deployment risks.

ABI Research also examines how operators can reduce their exposure to supply shortages. Recommendations include diversifying suppliers and reconsidering procurement strategies.

Optimizing Data Center Infrastructure: Market Sizing Thermal Management & Energy Consumption

What Is It?

A data-based research presentation covering the latest innovations in data center cooling technologies. ABI Research provides forecasts for cooling hardware system shipments, installed base, and revenue, broken down by technology and region. Facility types include the following:

• Conventional air-cooled facilities
• Air-cooled facilities with economized/free cooling
• Hybrid air + direct-to-chip liquid cooling facilities
• Hybrid air + liquid cooling facilities
• Primarily liquid-cooled facilities

A key trend is the growing adoption of hybrid cooling systems. As Research Analyst Paris McKinley explains:

“Hybrid cooling architectures are becoming the dominant deployment model. Despite rapid liquid cooling adoption, facility-level air cooling will always be required, even in primarily liquid-cooled environments.”

The presentation also assesses data center energy consumption, thermal requirements, and leading liquid cooling vendors' market shares.

How Does This Research Support the Data Center Industry?

These data-driven insights can shape cooling equipment manufacturers’ product and GTM strategies. They can identify regional growth opportunities and assess competitive positioning within the market.

Data center operators can learn how cooling requirements are changing as AI infrastructure power demands increase. McKinley's analysis highlights the importance of interoperability between liquid cooling and existing air cooling systems.

The findings can guide infrastructure planning, supplier selection, and investments in energy-efficient cooling technologies.

Data Center Market Data

Orbital Data Centers Economics Outlook

What Is It?

A market data spreadsheet comparing the economics of ODCs with traditional terrestrial infrastructure. ABI Research provides operator-level cost forecasts through 2035, alongside longer-term projections of when space-based computing could become cost-competitive.

A key insight from the data: the levelized cost per Watt ($/W) for orbital hyperscale data centers is forecast to decline from US$536 in 2026 to US$168 by 2035. SpaceX's progress in reducing launch costs will be critical to this outlook.

ODC Levelized $/W by Network Class

(World Markets: 2025 to 2035)

(Source: ABI Research)

How Does This Research Support the Data Center Industry?

Orbital computing remains prohibitively expensive compared to terrestrial data centers. These market forecasts help cloud industry stakeholders assess when space-based infrastructure could become a financially viable option for certain workloads. Moreover, ODC operators can devise ideal pricing strategies for their services.

Investors, defense & government procurement officers, and other cloud technology decision makers can compare the cost trajectories of individual operators against terrestrial benchmarks, including nuclear-powered facilities. That way, they gain a clearer basis for evaluating potential returns and the risks associated with orbital infrastructure investments.

Meanwhile, technology suppliers (e.g., semiconductors) can use the findings to prioritize Research and Development (R&D) projects that could bring orbital computing closer to cost parity.

Hyperscaler AI Capacity & Workloads

What Is It?

This 19-table dataset projects hyperscaler AI computing capacity over the next 10 years. Our analysts break down capacity by region and operator, while examining how AI training and inference requirements will evolve.

According to the data, global hyperscaler AI capacity is forecast to grow from 6.7 GW in 2025 to nearly 50 GW by 2035. North America and Asia-Pacific will drive much of this expansion, with Europe in a distant third place. Amazon Web Services (AWS) prevails as the top hyperscaler globally, followed by Microsoft Azure, Google Cloud, and Meta. However, rankings can fluctuate depending on the region being evaluated.

The market outlook also distinguishes between AI capacity used internally by hyperscalers and capacity available for external customers. This provides rich insight into future revenue opportunities as inference workloads expand.

Hyperscale AI Active Data Center Capacity by Region

(World Markets: 2025 to 2035)

(Source: ABI Research)

How Does This Research Support the Data Center Industry?

Hyperscaler expansion is a major driver of demand for AI-ready data center infrastructure in every major economy. These forecasts give colocation providers and equipment suppliers clarity on where capacity requirements are growing fastest. That ensures expansion strategies align with customer preferences.

The breakdown of training versus inference workloads supports Communication Service Providers’ (CSPs) long-term infrastructure planning. Financial analysts can also use the regional forecasts and operator capacity rankings to assess competitive positioning and identify markets with greater growth potential.

Sovereign Cloud AI Capacity & Workloads

What Is It?

This market data forecasts sovereign cloud AI capacity and workload demand across five global regions through 2035. The datasets track active computing capacity by operator (e.g., U.S. government, China Telecom, Ark Data Centers, etc.) to uncover leading sovereign service providers.

Asia-Pacific currently accounts for 58% of global sovereign AI capacity, driven largely by government policies requiring data to remain within national borders. China and South Korea are notable examples. ABI Research expects the region's share to reach 64% by 2035.

The research also distinguishes between sovereign AI capacity used internally and capacity available to external customers.

Sovereign Cloud AI Active Capacity by Region

(World Markets: 2025 to 2035)

(Source: ABI Research)

How Does This Research Support the Data Center Industry?

These forecasts help data center operators identify where sovereign cloud demand is growing and plan infrastructure investments accordingly. Regional breakdowns reveal opportunities tied to data residency requirements.

Equipment suppliers can leverage the data to anticipate demand for AI infrastructure as sovereign cloud capacity expands. The analysis of training and inference workloads also helps cloud providers assess future computing requirements.

There is additional insight into which sovereign cloud operators lead their respective markets, supporting partnership evaluations and regional market entry decisions.

Optical Line Systems (OLS)

What Is It?

The Optical Line Systems (OLS) market for scale-across AI data center connectivity is projected to grow significantly as distributed computing infrastructure expands. ABI Research forecasts combined market revenue in the United States and Europe to increase from US$750 million in 2026 to US$5 billion by 2035.

Tier One hyperscalers are the primary growth engine for OLS solutions. In North America, OLS activations among Tier One hyperscalers are expected to jump from 1,996 in 2026 to nearly 13,000 by 2035, representing a 23% CAGR.

Beyond regional forecasts, the datasets are broken down by data center capacity. OLS activations are categorized into one of the following: <1 MW, 1–10 MW, 10–50 MW, 50–100 MW, and 100 MW+.

Tier One Hyperscaler OLS Activations by Capacity

(World Markets: 2025 to 2035)

(Source: ABI Research)

How Does This Research Support the Data Center Industry?

ABI Research’s OLS market forecasts help optical networking suppliers assess future demand and prioritize data center portfolio investments. By examining growth across hyperscalers, neoclouds, and sovereign cloud providers, vendors can better understand which customer segments yield significant revenue.

Moreover, granular segmentation sheds light on how the optical networking market will evolve. Data center network planners can use these findings to evaluate suppliers and prepare their connectivity strategies for the growing demands of distributed AI infrastructure.

Data Center Competitive Benchmarks

Neocloud Providers

What Is It?

A competitive ranking evaluating 14 neocloud providers based on their technology capabilities and ability to deliver AI computing services at scale. ABI Research assesses each company using innovation and implementation criteria, including cluster scalability, hardware strategy, pricing, and service reliability.

Nscale ranked first overall, earning the top position through its strong hardware and supply chain strategy, distributed cluster scale, and AI software capabilities. Nebius, CoreWeave, and Vultr joined Nscale in the leaders category.

The benchmark includes individual company assessments and a ranking matrix that highlights competitive strengths and areas for improvement. Particular attention is given to how providers support demanding AI workloads and differentiate their offerings beyond basic GPU capacity.

How Does This Research Support the Data Center Industry?

Choosing a neocloud provider requires careful consideration of computing performance, service reliability, and long-term Capital Expenditure (CAPEX)/Operational Expenditure (OPEX). Our analyst-led market intelligence empowers Chief Technology Officers (CTOs) to compare available options on the marketplace and identify providers capable of supporting their AI workload requirements. The C-suite can use this competitive analysis to evaluate potential M&A opportunities.

Cloud infrastructure buyers can use the rankings to shortlist vendors and assess potential deployment risks. The findings are equally relevant to data center operators seeking neocloud partnerships as the market expands.

Lastly, detailed assessments of pricing models and security capabilities make procurement decisions easier as the analysis extends beyond headline GPU costs.

Open Line Systems for Data Center Interconnect Scale-Across

What Is It?

A competitive ranking of eight Open Line System (OLS) vendors supporting scale-across data center connectivity. ABI Research evaluates suppliers based on Innovation and Implementation criteria, including multi-rail capabilities, network openness, and orchestration.

Ciena, Nokia, and Cisco were identified as the market Leaders. The ranking examines how each vendor is positioned to meet the growing connectivity demands of distributed AI data centers.

Individual company assessments provide detailed scoring and highlight the strengths and weaknesses of each supplier. The analysis also explores how hardware disaggregation is changing the competitive landscape.

How Does This Research Support the Data Center Industry?

Data center operators can use these rankings to compare OLS vendors and identify suppliers best suited to their connectivity requirements.

Network architects gain insight into the technical capabilities needed for distributed AI infrastructure, particularly multi-rail density and orchestration.

For optical networking vendors, the competitive analysis helps benchmark market positioning and identify opportunities for product development or strategic partnerships. Moreover, leaders can leverage the ranking for their press visibility.

Connect with ABI Research’s Data Centers Experts

Data center market research applies to virtually every technology deployment consideration today. IoT devices, Agentic AI systems, manufacturing software, telco networks, fleet management systems, and more all rely on an underlying cloud platform. Extensive research serves as the key for operators and technology suppliers to map their strategic blueprint to where real computing demand will originate.

By having a research partner, organizations secure consistent access to the hard-to-find data and expert advisory needed to stay agile. As we’ve seen in recent years, the AI data center landscape is evolving quickly. Some will miss market signals, leaving an opportunity for research-driven organizations to ascend to the top of their respective technology market. If you need a research partner for your data center infrastructure strategy, leave us a message and we will respond shortly.

Learn more about ABI Research’s data center research solutions with the following resources:

• Data Centers Research Service
• Hyperscalers
• Custom Research & Marketing

Meet the ABI Research Data Centers Analyst Team

Malik Saadi, Chief Research Officer

Research Focus: Malik Kamal-Saadi is head of the Strategic Technology Group at ABI Research focusing on transformative technologies and innovation across telecommunications and connectivity technologies, enterprise IT and OT technologies, cloud, edge, and distributed computing, AI, data warehouses, robotics and automation, and other adjacent technologies. In his role, Malik leads ABI Research’s thought leadership, consultancy services, syndicated services, strategic positioning, market forecasts, competitive assessments, and market analysis.

Leo Gergs, Research Director

Research Focus: As a Research Director, Leo Gergs leads enterprise connectivity and cloud and data center research at ABI Research. His work covers enterprise drivers, use cases, and provider strategies for technologies such as private cellular, Software-Defined Wide Area Network (SD-WAN), and Fixed Wireless Access (FWA). He also analyzes key trends shaping the data center market, including the rise of neocloud providers, the growing importance of sovereign cloud models, and their implications for enterprise infrastructure, regulation, and workload placement.

Larbi Belkhit, Principal Analyst

Research Focus: Larbi Belkhit is a Principal Analyst and part of ABI Research’s Strategic Technologies research group, leading its coverage of AI software & platforms. He delivers end-to-end research, closely analyzing adoption trends, growth opportunities, business models, and domain-specific implementations in end markets.

Andrew Cavalier, Principal Analyst

Research Focus: Andrew Cavalier is a Principal Analyst specializing in satellite communications and space technologies. His expertise spans next-generation connectivity, Non-Terrestrial Networks (NTNs), and the integration of satellite and terrestrial systems. With a background in market research, government program management, and software engineering, Andrew provides strategic insights that help industry stakeholders navigate emerging opportunities in space and telecommunications. He regularly contributes to thought leadership through reports, consulting, and industry events, focusing on how space innovation drives digital transformation across global markets.

Paris McKinley, Research Analyst

Research Focus: Paris McKinley, Research Analyst, is a member of ABI Research’s Manufacturing, Energy & Buildings team. Her research focuses on transformational technologies and best practices in the smart buildings market, with a particular emphasis on office buildings, industrial facilities, data centers, and other commercial buildings.