DATA CENTRE STRATEGY
The data centre industry witnessed its most transformative year on record in 2024, with mergers and acquisitions reaching US $ 73bn in closed deals – topping the previous peak of US $ 52bn from just two years earlier.
Traditional data centres, built for predictable enterprise workloads, now face demands from AI applications that consume exponentially more power and generate heat levels that pose challenges for conventional cooling systems. The result has been a feeding frenzy among private equity firms and strategic acquirers seeking facilities that can handle tomorrow’ s computational demands.
With the data centre industry seeing constant growth, the momentum shows no signs of abating. Early 2025 saw over US $ 7bn in completed transactions, with another US $ 15bn in agreed deals awaiting closure.
AI workloads shatter traditional data centre assumptions The arrival of generative AI has fundamentally altered data centre operations. Where conventional servers might draw 5-10 kilowatts per rack, AI workloads powered by GPUs can demand 50-100 kilowatts or more.
“ AI is driving a lot of changes as it requires high-performance CPUs and GPUs, which generate a lot of heat. The data centre industry is mostly on air cooling design, which can cool up to only 50 kilowatts, but that is not enough for high-performance CPUs and GPUs required by AI,” explains Sung Kim, Global Head of Data Centre Liquid Cooling Solutions at Castrol.
The scale of this transformation becomes clear in the hyperscalers’ spending commitments. Microsoft has allocated US $ 80bn specifically for AI data centres and cloud capacity, while Meta raised its 2025 capital expenditure guidance to between US $ 64bn and US $ 72bn: a 73.5 % increase over 2024 levels.
Goldman Sachs, meanwhile, projects that data centre power consumption will increase 160 % by 2030, driven primarily by AI workloads.
The technological arms race creates a powerful incentive for acquisition over development. AI hardware, and particularly the GPU chips that power today’ s most powerful LLMs, has evolved at an unprecedented pace in recent years. A facility designed around today’ s state-of-the-art processors may require extensive and costly retrofitting within two years to accommodate nextgeneration hardware with different power and thermal profiles. Acquiring operational facilities, therefore, provides not just immediate capacity but access to engineering teams experienced in managing rapid technology transitions and complex cooling architectures.
Private equity establishes market dominance with 80-90 % share It’ s for this reason that private equity firms have evolved from occasional participants to data centre market
104 September 2025