Last year, data centers worth $57 billion were acquired or merged. This number surpassed the previous record of $52 billion from 2022. This information comes from a report by the Synergy Research Group. Chief Analyst John Dinsdale explains that the rising demand for data center capacity is driven by cloud services, social networks, and other digital services. He expects this trend to continue and states, “Generative AI will further boost the already strong demand.”
Unlike the record in 2022, the high total in 2024 was mainly due to numerous smaller deals under $2 billion. The largest transactions included two separate investments in the American company Vantage Data Centers, totaling $9.2 billion. Another investment of $3.1 billion was made for the company’s business in Europe, the Middle East, and Africa (EMEA).
The analysts also note an increasing share of private equity in the market. This share is now between 80 and 90 percent, compared to just 54 percent five years ago. Dinsdale explains, “Operators of specialized data centers could not make these investments themselves.” Instead, private investors were willing to step in due to the growing market.
Suppliers of data centers also benefited from the rising demand for computing power last year. Due to the increasing use of AI applications, revenues in the public cloud and hyperscaler sectors rose by 48 percent. Particularly, GPU manufacturer Nvidia benefited from this development and moved to the top of the market behind contract manufacturers. At the same time, sales to enterprise customers increased by 21 percent, reversing the previous trend. The demand for switches in data centers also rose.
In addition to last year’s deals, the official completion of already agreed-upon deals worth $29 billion is still pending. According to the study, transactions worth $15 billion are already underway. Given this development, everything indicates that there will be a boom in data center mergers and acquisitions this year as well, according to Dinsdale.