Figures from the real estate services firm suggest, however, that the increased demand for AI will see such workloads represent less than 50% of data centre demand in 2030, with traditional, lower-intensity workloads like data storage and cloud-based applications set to make up most of the demand.
“The pace of AI innovation is not slowing down, and the data centre industry must continue to adapt,” said Jonathan Kinsey, EMEA lead and global chair for data centre solutions at JLL. “AI’s transformative power demands have already reshaped our world, yet its most significant and enduring effect may lie in how we rise to meet the substantial energy demands required to fuel this technological revolution.”
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JLL’s report states that increased data centre demand will have a damning impact on power, with global data centre energy demand potentially doubling over the next five years.
The findings suggest that data centres will make up only about 2% of global electricity consumption in 2025, though sites in already clustered markets like Northern Virginia, Tokyo and London are facing significant bottlenecks.
“Scarcity is only half of the power story; transmission is the other part,” said Andy Cvengros, co-lead for US data centre markets at JLL. “The time it takes to erect transmission lines and substations to connect new data centres to the grid can be up to four years or more in some markets.
“Both established and emerging markets will see higher development levels in 2025, along with more developers exploring other energy solutions like natural gas and fuel cells.”
JLL’s report highlights the increased adoption of nuclear power as a potentially powerful alternative for operators looking to replace traditional fossil fuels to power AI workloads.
AWS, Google, and Microsoft are ramping up their use of nuclear power, either tapping sites near campuses or purchasing small nuclear reactors (SMRS), which provide localised power to facilities.
Though commercial deployment of SMRs in the US is unlikely until 2030, JLL’s report suggests more news related to SMR deployments will begin in 2025.
Investment interest to remain strong
JLL’s report states that investor appetite for data centre projects will remain strong through 2025, largely due to excitement around AI’s potential.
The report suggests that investment demand will also remain strong due to low supply due to power scarcity and potentially attractive return on investments.
The real estate services firm suggests 2025 will represent a record year for data centre development financing, while trading volume will moderately increase.
“Data centre activity has exploded over the last few years, with much of the demand geared toward single-tenant ground-up construction,” said Carl Beardsley, US data centre leader at JLL Capital Markets. “Significant barriers to entry exist for new investors based on the amount of capital required as well as a longer development cycle.
“In 2025, we expect many opportunities for core investors to recapitalise the single-tenant data centres that continue to be built.”
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