- Demand for data center capacity will rise sharply in 2026 due to AI and cloud growth
- Most new data center capacity is pre-leased to large tech firms, reducing vacancy risks
- Global data center electricity use is projected to reach 600 TWh in 2026, a 14% rise
Demand for data center capacity to support artificial intelligence (AI), cloud computing and internet services will continue to rise sharply in 2026, according to a report by Moody's. Most of this new capacity is pre leased to large tech companies, or hyperscalers, limiting the risk of introducing a surplus of unoccupied capacity into the market, while increasing counterparty concentration risk.
The race to build new data center capacity remains in its early stages with robust capacity growth poised to continue globally over the next 12 to 18 months. The International Energy Agency projects that global data center capacity as measured by electricity consumption will reach about 600 terawatt-hours (TWh) in 2026, up 14% from an estimated 525 TWh in 2025, which is a 20% increase from 2024 actual consumption of 436 TWh
The race to energize new data center capacity remains in its early stages with robust capacity growth poised to continue globally for at least the next 12 to 18 months. The International Energy Agency projects that global data center capacity as measured by electricity consumption will reach about 600 TWh in 2026, up 14% from an estimated 525 TWh in 2025, which is a 20% increase from the actual 436 TWh consumed in 2024 (see Exhibit 1).
Even larger hyperscale data center projects with capacity levels exceeding 300 MW will begin coming online in 2026, exponentially increasing capacity in some markets while also creating new markets. These new massive facilities will further accelerate the AI and cloud race.
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