NIX Solutions: Data Center Investment Trends in 2023 and Early 2024

According to research from law firm Linklaters, 2023 marked the second-largest year in the last decade for data center investment, with costs in this segment estimated at $36 billion. The surge in investments is driven by the rapid expansion of data center infrastructure amidst the fast-paced development of AI and large data centers (LDCs).

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North America continues to dominate the data center market, accounting for 62% of all capital investments in 2023. This equates to approximately $22.3 billion. Meanwhile, Europe has seen substantial growth in data center activity. The share of investments in Europe rose from 6% in 2022 to 20% in 2023, amounting to about $7.2 billion. The volume of transactions in the European data center market is steadily increasing, reflecting this upward trend.

Financing and Regional Distribution in Early 2024

Asset-backed securitization (ABS) is emerging as an attractive financing option for data center projects. This model offers a more cost-effective way to refinance existing bank debt. In 2023, ABS transactions accounted for approximately $5.4 billion in the US alone, notes NIX Solutions.

During the first five months of 2024, global data center investment reached $22 billion. Of this, 69%, or approximately $15.2 billion, was invested in North America. Europe also continued its upward trend, receiving 29%, or nearly $6.4 billion, of the total investments during this period. We’ll keep you updated on further developments in these markets as more data becomes available.