Investment giant BlackRock foresees significant potential for massive growth in data centers in the coming years, driven largely by the increasing demand for AI workloads. In its mid-year 2024 global outlook presentation, BlackRock emphasized the crucial role that data centers will play in the future. The investment firm likened the current technological transformation to the Industrial Revolution, predicting that data centers will become critical infrastructure components as AI demand surges.
BlackRock’s global chief investment strategist, Wei Li, highlighted that AI data center growth is expected to increase annually by 60 to 80% in the near future. Responding to inquiries from Data Center Knowledge, BlackRock executives expressed strong optimism about the role of data centers, while acknowledging the challenges within the digital infrastructure sector. Jean Boivin, head of the BlackRock Investment Institute, pointed out that multiple factors must align to realize the AI revolution and its potential productivity gains. The growth estimates are largely based on industry analyst expectations for the next few years.
The 2024 Midyear Global Outlook report outlines how the race to enhance AI capabilities is driving significant capital investment. Li noted that AI and the low-carbon transition could trigger unprecedented capital spending in a shorter time frame than previous technological revolutions. BlackRock’s estimates suggest that the capital spent on AI is comparable to the largest expenditures in history, akin to major global transformations like the Industrial Revolution.
Over recent months, BlackRock has heavily invested in data centers to capitalize on the growing interest in AI. David Giordano, global head of climate infrastructure at BlackRock, mentioned investments in data center developments in the United States, particularly in Northern Virginia, and in Germany, through partnerships. Data center analysts have been closely monitoring the industry’s growth. Alan Howard, principal analyst at Omdia, noted that the construction and expansion frenzy in data centers began some time ago to meet strong cloud services demand, with the pandemic acting as a significant catalyst. The emergence of AI has further amplified the demand for data centers, leading to a surge in development activities.