According to analysts, data center capacity in Asia-Pacific (APAC), the fastest growing market globally, is expected to double in the next five years, thanks to increasing adoption. more artificial intelligence (AI) and cloud computing.
Data center capacity in APAC is expected to grow at a CAGR of nearly 20% through 2028, according to a report by credit rating, research and data firm Moody's. to about 24,800 megawatts (MW) - double the current capacity of 10,500MW. Also according to Moody's, data center capacity in APAC will account for 30% of global capacity in the next 5 years, with more than 564 billion USD of investment.
According to S&P Global, the investment boom in AI software development created in APAC will drive the growth of the data center market in the region. “North America is the largest market when it comes to generative AI, with about 63,” said Melissa Incera, data, AI and analytics research analyst at S&P Global Market Intelligence, in a webinar last week. % of global revenue".
She added that, due to strong investments in other regions to meet growing local demand, S&P Global expects revenue from North America to decline and increase in other regions across the world. the world, especially APAC.
S&P Global estimates that the APAC region's data center revenue market share will increase from 14% to 20% by 2028, while North America's share will decrease from 63% to 55%.
However, according to Nidhi Dhruv, Vice President and senior credit officer at Moody's, data center expansion in APAC could pose greater carbon transition and water management risks for both operators. as well as investors.
According to the International Energy Agency, the growing demand and adoption of generative AI, such as OpenAI's ChatGPT, is expected to drive global data center electricity consumption to double from 2022 to 2026, because huge amounts of electricity are needed to keep servers running and cool them.
However, most countries in APAC rely heavily on fossil fuels to generate electricity. China, the largest data center market in APAC with a capacity of 3,956MW, is heavily dependent on coal power. Last year, the country generated nearly two-thirds of its electricity from coal.
Rising water shortages in some Asian markets could also lead to service disruptions as water is still needed for cooling and maintaining humidity in data centers.
The non-profit organization China Water Risk based in Hong Kong (China) said in a report this year that China's data centers consume about 1.3 billion cubic meters of water each year, enough for 26 million users. As more and more data centers are built in China, that number could reach more than 3 billion cubic meters by 2030, more than the water needs in South Korea.
To meet climate commitments, APAC governments have begun regulating the environmental impact of data centers. Last week, China announced an action plan on sustainable development of data centers, setting goals for improving energy efficiency and using renewable energy.
