As artificial intelligence (AI) applications continue to expand, the operational costs of data centers are also on the rise. According to The Wall Street Journal, some data centers in the United States have been forced to raise prices for their customers to cope with the additional expenses brought about by AI. Meanwhile, data indicates that the demand for large-scale data centers and hosted data centers is rapidly increasing, while the capacity demand for enterprise-built data centers is relatively declining.
Data centers face cost pressures not only from power consumption but also from processing capacity, advanced chips, supply chain challenges, and AI technology. The Wall Street Journal reports, "AI applications consume more energy than traditional software because they need to process more data. Within a few days, a single AI model can consume tens of thousands of kilowatt-hours of electricity. Generative AI models, such as the technology used in OpenAI's ChatGPT chatbot, consume 100 times more than standard AI tools." Additionally, costs in construction, labor, and utilities are continuously rising.
Corresponding to the increase in data center costs is the rapid expansion of the cloud services market. According to data from Synergy Research Group, enterprise spending on cloud services has grown at an annual rate of approximately 42% over the past decade, rising from $10 billion in 2012 to $227 billion in 2022. In contrast, spending on data center hardware and software by enterprises has grown at only about 2% annually.
Synergy Research Group also provides distribution data on global data center capacity usage. In 2022, large-scale data centers accounted for 37% of the total global data center capacity, compared to just 17% in 2017. Large-scale data centers refer to those large facilities operated or leased by cloud service giants like Amazon, Microsoft, and Google. Half of these are self-owned data centers, and the other half are leased data centers. Non-large-scale hosted facilities account for 23% of the share. Meanwhile, enterprise-built data centers held a 40% share in 2022, a significant decrease from 60% in 2017.
Synergy Research Group predicts that over the next five years, "while the proportion of enterprise-built data centers in total capacity will decrease by more than two percentage points each year, their actual capacity will only decrease slightly. The proportion of hosted facilities in total capacity will remain relatively stable." The company also forecasts that by 2027, large-scale data centers will account for over 50% of the capacity share, while enterprise-built data centers will decrease to less than 30%.