AI Fuels Data Center Growth in APAC
The Asia-Pacific (APAC) region is poised for a significant expansion in data center capacity, driven by the increasing adoption of artificial intelligence (AI) and cloud computing. Analysts predict that APAC’s data center capacity will double in the next five years, with a compound annual growth rate of nearly 20% through 2028. This growth will result in a capacity of approximately 24,800 megawatts (MW), more than doubling the current capacity of 10,500MW.
Key Insights:
- APAC is expected to account for 30% of global capacity expansion over the next five years
- The region will see over $564 billion in investment
- Generative AI software development is a major driver of this growth
- APAC’s share of global generative AI revenue is projected to increase from 14% to 20% by 2028
Environmental Challenges and Regulatory Response
The rapid expansion of data centers in APAC brings significant environmental concerns. As data centers primarily rely on non-sustainable power sources, their electricity consumption is expected to more than double from 2022 to 2026. This surge in energy demand poses challenges for countries heavily dependent on fossil fuels for power generation.
To address these issues, APAC governments are implementing regulations to promote sustainable development and renewable energy use in data centers. For example, China has unveiled an action plan setting targets for improved energy efficiency and increased use of renewable energy in data centers. These measures aim to mitigate the environmental impact of the booming data center industry while supporting its growth.
