How AI Is Fueling a $758 Billion Build-Out of Global Compute Power

The global Artificial Intelligence (AI) infrastructure market is accelerating at an unprecedented pace, with spending projected to reach an extraordinary $758 billion by 2029, according to new data from the International Data Corporation (IDC).

The scale of investment already underway shows how rapidly the world is reorganizing around AI.

In the second quarter of 2025, organizations spent $82 billion on compute and storage hardware for AI deployments, a staggering 166% year-over-year increase. After years of strong double-digit growth, the market has entered a hyper-growth phase powered by escalating demand for next-generation computing.

Generative AI Is Fueling an Infrastructure Boom

The rise of Generative AI is the primary force driving this surge. Training and operating large foundation models like GPT-4 and its successors requires extraordinary amounts of computational power, and the industry has responded with massive investment in accelerated hardware.

Servers equipped with GPUs and other advanced accelerators have become the defining engine of the market. In 2Q25, accelerated servers accounted for 91.8% of all server AI spending and grew by an astonishing 207.3% year over year.

Servers as a whole made up 98% of all AI-centric infrastructure spending, and IDC projects that accelerated systems will exceed 95% of all server spending by 2029, cementing their position as the core of global AI capability. With this trajectory, AI infrastructure will effectively become synonymous with accelerated infrastructure.

Beyond servers, storage spending in AI infrastructure is also driven by the need to manage large datasets required for training AI models, as well as the storage of training, checkpoints, and data repositories for inference phases. This category reported a 20.5% year-over-year growth in 2Q25, with 48% of the spending coming from cloud deployments.

IDC has also revised its expectations upward, anticipating that the AI investment ramp will continue through the end of 2025 and well into 2026 due to expanding pipelines from major technology vendors and large enterprise buyers.

“There is a distinct possibility that more AI-related investment will be announced in the coming years that will add to and extend the current mass deployment phase of accelerated servers well into 2026 and even beyond,” said Lidice Fernandez, group vice president, Worldwide Enterprise Infrastructure Trackers.

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Cloud Titans Are Dictating the Pace

A significant portion of this infrastructure boom is unfolding inside cloud environments. In 2Q25, 84.1% of all AI infrastructure spending was allocated to cloud and shared environments, with hyperscalers and digital service providers accounting for 86.7% of that amount.

This concentration reveals a defining trend: while AI access is becoming more democratized for businesses, the underlying computational power is increasingly centralized in the hands of cloud giants such as AWS, Azure, and Google Cloud. These companies are investing billions into accelerated data centers and then renting that capability to enterprises and startups.

Their ability to scale quickly allows thousands of organizations to tap into high-performance infrastructure without facing the immense capital costs or supply constraints associated with acquiring their own accelerated hardware.

Software, Agentic AI, and the Next Spending Frontier

While accelerated hardware dominates the current spending cycle, the ultimate value of this infrastructure will be unlocked by the software layer built on top of it.

This is why the next frontier of investment is expected to be in platforms and the service layer that brings this infrastructure to life.

IDC forecasts that spending on AI platforms will grow at a remarkable 48.5% CAGR through 2027, driven by the rise of Agentic AI—autonomous systems capable of managing complex tasks, orchestrating workflows, and amplifying overall productivity.

These systems are multiplying the number of AI models in production, which in turn is fueling long-term platform spending. As enterprises integrate AI into core operations, investment is shifting toward the services, consulting, and process transformation required to fully capture AI’s value.

Every dollar spent on AI solutions is expected to generate $4.9 in global economic output, a multiplier that underscores AI’s role as a new engine of economic growth.

Sovereign AI and the Expanding Edge

The sheer scale and strategic importance of this AI build-out have ignited a global competitive struggle for compute dominance and sovereign AI.

Governments worldwide are investing heavily to develop domestic AI models and build local compute capacity trained on region-specific data. This push for digital self-reliance is accelerating infrastructure spending and reshaping global technology strategy.

The United States is currently the dominant force in AI infrastructure, accounting for 76% of global spending in 2Q25.

China follows at 11.6%, with Asia-Pacific, including Japan, at 6.9%, and Europe, the Middle East, and Africa at 4.7%. But dominance today does not guarantee dominance tomorrow. China is projected to grow the fastest with a 41.5% CAGR over the next five years, slightly outpacing the United States at 40.5%, while EMEA and APJ are expected to grow at 17.3% and 14.3%, respectively.

The Power and Cooling Crunch

However, this rapid expansion in AI compute is colliding with a harsh physical reality: power. High-density AI racks draw far more electricity than traditional servers, intensifying pressure on national power grids.

U.S. regulators expect data center electricity consumption to triple to 7.5% of all national power usage by 2030, a shift that is forcing both industry and government to rethink energy strategy. To support the demand, operators are adopting high-efficiency cooling systems that would have been considered niche only a few years ago.

Liquid cooling is becoming the standard for new AI-focused facilities, and data centers are being designed from the ground up with AI-optimized thermal systems. Governments are also stepping in with grid upgrade initiatives and large-scale infrastructure plans, recognizing that energy capacity has become a strategic priority tied directly to national competitiveness.

The Bottom Line

The AI infrastructure market is no longer just a segment of the tech industry—it is the foundation of the next era of global economic transformation.

Cloud giants are racing to scale, governments are building sovereign AI capabilities, enterprises are restructuring entire operations around new systems, and the world’s power infrastructure is being reshaped in response to unprecedented demand.

With spending set to reach $758 billion by 2029, the world is now in the largest compute build-out in history, and this is only the opening phase of what’s to come.