Emerging economies are on the brink of becoming the next major growth hubs for data centres, with plans for nearly twice the current global capacity, amid challenges around energy, water, and policy support. The surge is fuelled by rising AI-driven demand and shifts away from developed countries’ restrictions.
Emerging markets are poised to become the next major growth frontier for the data centre sector, with planned projects now amounting to almost twice the capacity of facilities operating worldwide, according to a report by S&P Global Ratings.
The shift reflects growing resistance to new data centre construction in developed economies, which is pushing operators to look for expansion opportunities elsewhere. S&P Global says that could channel substantial investment into digital infrastructure across faster-growing markets, but the benefits are unlikely to be spread evenly.
The pace at which planned projects become operational will depend heavily on local conditions, including government policy, access to natural resources and the quality of supporting infrastructure. Countries with reliable electricity grids, clearer permitting processes, access to renewable power and sufficient capital are likely to be the biggest winners, according to S&P Global’s research on sustainability and technology trends.
Energy and water are the sector’s main constraints. In Asia-Pacific, rapid growth in markets such as India is putting more pressure on power systems and increasing the urgency of renewable energy deployment, S&P Global says. Concerns about grid reliability may also drive some operators towards independent power sources that are less environmentally friendly. Water stress in coastal and industrial areas is expected to accelerate the use of more efficient cooling systems.
In the Middle East, abundant and relatively cheap electricity is supporting data centre growth, but severe water scarcity remains a major obstacle. S&P Global says developers in drier parts of the region may need to adopt technologies such as solar-powered desalination and closed-loop cooling to keep projects viable. That broader picture comes as S&P Global has also warned that AI-driven demand is expected to more than double data centre power use by 2030, intensifying pressure on utilities, grids and investors alike.
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