Datacenter Demand Surges Amid AI Boom Despite Power Challenges

  • Global demand for datacenter space is soaring due to the AI boom.
  • Power shortages are a critical concern across North America, Europe, Latin America, and Asia-Pacific.
  • North America saw a significant 24.4% increase in datacenter inventory in Q1 2024.
  • Europe’s data dormitory market expanded nearly 20%, with Paris leading at 40% growth.
  • Latin America and Asia-Pacific also experienced notable growth in datacenter capacity.
  • Average rental rates are rising sharply across major markets due to high demand and construction costs.
  • Emerging markets like Oslo and Madrid are becoming attractive for datacenter investments.

Main AI News:

Demand for datacenter space is soaring worldwide amidst the AI revolution, but the industry is grappling with severe power shortages, reports CBRE. Across North America, Europe, Latin America, and Asia-Pacific, datacenter operators are facing significant challenges due to electricity constraints, even as vacancy rates plummet amid robust demand.

CBRE’s latest findings highlight a pervasive concern among large corporations struggling to secure sufficient datacenter capacity amid construction delays and power-related obstacles. Despite these challenges, the AI sector continues to be a major driver of future demand.

In Q1 2024, North America alone saw a 24.4 percent increase in datacenter inventory, resulting in 807.5 MW of additional capacity across key markets such as Northern Virginia, Chicago, Dallas, and Silicon Valley. Local governments are responding by streamlining permitting processes and integrating renewable energy sources to alleviate power shortages.

Meanwhile, Europe’s data dormitory market expanded nearly 20 percent, with significant growth observed in Frankfurt, London, Amsterdam, and Paris (FLAP). Despite supply shortages, Paris recorded a remarkable 40 percent year-on-year growth. CBRE emphasizes the trend of pre-leasing facilities as a clear indicator of ongoing investment needs, despite persistent challenges in sourcing adequate power.

Latin America and Asia-Pacific also saw substantial growth in datacenter inventory, with pricing pressures intensifying due to the imbalance between high demand and limited availability. Average rental rates surged significantly across all major regions, reflecting the industry’s struggle with rising construction costs and operational expenses.

CBRE’s analysis underscores the critical need for continued investment in datacenter infrastructure amidst evolving regulatory landscapes and escalating demand from hyperscalers. Emerging markets like Oslo and Madrid are gaining traction, driven by favorable economic conditions and lower power costs, positioning them as burgeoning hubs for future datacenter development.


The global datacenter market is experiencing robust growth driven by AI advancements, yet faces formidable challenges with power shortages. As demand continues to outstrip supply in key regions, stakeholders must navigate rising costs and regulatory complexities while seeking opportunities in emerging markets to sustain growth and meet escalating digital infrastructure needs.


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