The Data Centre Industry Is Splitting in Two
Inside the emerging divide between power-haves and power-have-nots, and what it means for institutional allocators
Executive Summary
The data centre industry has entered the most aggressive capital deployment cycle in technology history. Hyperscalers will spend roughly $640 to $670 billion in 2026 alone, more than the GDP of Sweden, driven by insatiable demand for AI compute. This buildout is reshaping energy markets, straining electrical grids, reviving mothballed nuclear plants, and sparking fierce community opposition.
With vacancy rates at record lows (1.6% in primary US markets), rental rates surging 20% to 35% year over year, and 77% of new capacity pre-leased before completion, the supply-demand imbalance shows no signs of easing before 2028. Yet the risks are mounting: transformer shortages stretch lead times to 2.5 years, PJM capacity auction costs have surged from $2.2 billion to $16.4 billion in three years, and over $98 billion in projects were disrupted by community opposition in a single quarter. The industry now sits at a critical juncture where power availability, not capital, is the binding constraint on growth.
Key Market Indicator
Current Value
Combined Hyperscaler CapEx (2026 Guidance)
$640B to $670B
US Primary Market Vacancy Rate
1.6% (Record Low)
Northern Virginia Vacancy
0.5%
Wholesale Lease Rate Growth (H1 2025)
+19% YoY
Pre-leased Under-Construction Capacity
77%
Global DC Energy Consumption (2024)
415 TWh
IEA Projected Consumption (2030)
945 TWh
PJM Capacity Auction Cost (Dec 2025)
$16.4 Billion
Data Centre M&A Volume (2025)
$61 Billion+
Moody’s 5-Year Investment Projection
$3 Trillion
Hyperscaler Spending Has Entered Uncharted Territory
The Big Five hyperscalers (Amazon, Alphabet, Microsoft, Meta, Oracle) collectively spent approximately $381 billion in 2025 and have guided to $640 to $670 billion for 2026, a trajectory that Goldman Sachs projects will reach $1.15 trillion cumulatively from 2025 to 2027. Capital intensity has hit 45% to 57% of revenue, levels previously unthinkable for technology companies.
Amazon
Amazon led 2025 spending at $131.8 billion and has guided to approximately $200 billion for 2026, predominantly directed at AWS, which posted its fastest growth in 13 quarters at 24% year over year. Amazon added 3.8 GW of data centre capacity in the trailing twelve months through Q3 2025 and is on track to double its 2022 power capacity again by 2027. Key investments include a $20 billion Pennsylvania campus near the Susquehanna nuclear plant, $15 billion in Northern Indiana (2.4 GW capacity), and a $50 billion commitment for federal AI and supercomputing infrastructure.
Alphabet
Alphabet spent $91.4 billion in 2025, revised upward three times during the year, and stunned analysts with $175 to $185 billion guidance for 2026, nearly double 2025 and far above the $121 billion consensus. Google Cloud revenue surged 48% year over year in Q4 2025, its fastest growth since 2021, with a $240 billion cloud backlog. The company acquired energy infrastructure developer Intersect for $4.75 billion and signed deals with Brookfield Renewables ($3 billion), Clearway Energy ($2.4 billion), and Entergy ($4 billion) to secure power.
