Straits Research published a report, “Global AI Data Center Market Size & Outlook, 2026–2034”. According to the study, the global market size is valued at USD 17.33 billion in 2025 and is projected to expand to USD 147.58 billion by 2034, registering a compound annual growth rate (CAGR) of 28.5%.

Market Dynamics

The AI data center market is driven by the rapid expansion of AI workloads, increasing adoption of machine learning and deep learning use cases, and increased demand for high-performance computing (HPC) from enterprises and cloud providers. Increasing adoption of AI across industries such as IT & telecom, healthcare, BFSI, and industrial automation also fuels the adoption of data centers designed to support AI.

Government incentives for AI adoption, data sovereignty regulations, and investment in digital infrastructure in the U.S., Canada, Germany, and Japan are growth drivers. Hyperscale, edge, and modular data center strategies, along with the adoption of energy-efficient cooling and high-density GPU clusters, are creating new opportunities for AI data center operators and solution providers.

Market Highlights

• Segmental Leadership: Hardware holds the largest share, specifically 52.41%, while the Edge Data Centers segment is projected to register the fastest CAGR of 30.15%.
• Deployment Outlook: Cloud-based data centers hold the highest market share, namely 48.26% in 2025, driven by scalable AI workloads and enterprise adoption.
• AI Application: AI Model Training leads with over 38.64% market share, reflecting high demand for training large AI models.
• Regional Insights: North America dominates with over 34.86% share, driven by strong cloud infrastructure investments and government-backed AI initiatives .