As AI workloads explode, so does the demand for next-gen infrastructure. Within the first quarter of 2025, international spending on bodily information heart infrastructure surged 17% year-over-year, in accordance with a current report by Dell’Oro Group. Hyperscalers and colocation suppliers are racing to deploy high-density racks, superior energy programs and liquid cooling to maintain up with AI’s large urge for food for compute capability.
However whereas the U.S., South Korea and different nations pour billions into AI infrastructure, some nations are falling behind. Australia, for instance, dangers being unnoticed of the AI infra race. In sharp distinction to Taiwan’s $6.5 billion nationwide AI push, Australia has but to commit federal funds to sovereign compute or AI information facilities. Specialists warn this lack of funding threatens nationwide safety and financial competitiveness.
In the meantime, Microsoft is pushing boundaries on sustainability, repurposing waste warmth from its information facilities to energy carbon seize. The corporate’s new DACinDC pilot is a daring experiment to cut back the carbon footprint of AI itself—turning environmental value into local weather motion.
Collectively, these tales sign a defining second for the AI infrastructure discipline: capital, coverage and sustainability methods should now align—or threat falling quick within the race to energy the way forward for AI.
AI growth fuels 17% surge in information heart infra spend: Dell’Oro
The bodily spine of the AI revolution is rising at a quick tempo. In response to Dell’Oro Group, the worldwide information heart bodily infrastructure (DCPI) market surged 17% year-over-year in Q1 2025, marking the fourth straight quarter of double-digit development, mainly pushed by heavy funding from hyperscalers and colocation suppliers scaling as much as deal with large AI workloads.
Liquid cooling is gaining momentum, with direct liquid cooling revenues greater than doubling and projected to high $2.5 billion this 12 months, in accordance with the report. Energy distribution stays the fastest-growing phase, particularly overhead busways, which expanded by over 40%. In the meantime, rack energy densities are climbing sharply, with 600kW deployments turning into extra frequent and even 1MW being explored.
Whereas all areas posted development, North America led by way of enlargement with a 23% year-on-year improve. EMEA and China recorded low-teens development in U.S. greenback phrases.
Australia’s lack of AI infra funding poses strategic threat, skilled warns
Australia’s failure to put money into sovereign AI infrastructure is turning into a nationwide threat, in accordance with Sue Keay, Director of the united states AI Institute and founding father of Robotics Australia Group. She warns that in contrast to nations resembling South Korea, Japan, the U.S. and members of the EU, Australia has but to commit federal funding to nationwide compute amenities or devoted AI information facilities.
“Australia’s ‘relentless willpower’ to not put money into sovereign AI infrastructure is clearly a strategic threat that can undermine nationwide safety, financial prosperity and create challenges for our society as we lose the power to manage the content material we eat,” Keay advised W.Media.
The skilled additionally warned that over-reliance on international tech corporations leaves Australia weak: “We can’t assume within the present geopolitical context that these know-how suppliers will act in our nationwide curiosity,” she mentioned.
Whereas state governments in Australia have made remoted investments in AI-related infrastructure, Keay argues that nationwide management is missing.
Drawing inspiration from Taiwan, which has dedicated over AUD10 billion ($6.5 billion) to AI growth, Keay argues that “Australia must be seeking to do the identical. We’d be alone amongst developed nations in pondering that we are able to enter the AI period with zero public funding required.”
Microsoft pilots carbon seize with information heart waste warmth
Microsoft is attempting one thing new with its waste warmth: utilizing it to energy Direct Air Seize (DAC) programs that pull carbon from the ambiance. As detailed within the firm’s newest sustainability report, the DACinDC pilot repurposes warmth from AI workloads to drive carbon removing processes, utilizing AI to optimize the seize supplies and enhance effectivity.
In contrast to conventional waste warmth reuse in district heating programs, this method sends it instantly into DAC programs situated onsite at information facilities. Microsoft defined that the system can reuse as much as 85% of that waste warmth. If scaled, this might considerably decrease the price and vitality footprint of DAC, which is without doubt one of the most costly types of carbon removing at present.
By integrating DAC with information heart infrastructure, Microsoft goals to offset a number of the environmental prices of operating high-intensity AI workloads and assist carry DAC tech nearer to business viability.
Different tales we’re watching:
On this report, Cushman & Wakefield highlights that the Asia Pacific area is on monitor to turn out to be the world’s largest colocation information heart market by 2030, surpassing america in each whole capability and rental income.
Change to construct AI factories in Las Vegas
SambaNova unveils turnkey AI inference resolution for DCs
Empyrion Digital inaugurates AI-driven information heart in Seoul
xAI’s head of infrastructure quits
evroc launches ops with sovereign cloud and AI providers
Thanks for studying. Keep tuned for extra updates on the evolving AI infra area.
