#United States #AI Investment #Redwood City #Data Center #Dell'Oro Group

Surge in Data Center Capital Expenditure in Q3 2025

The Dell'Oro Group recently reported a significant increase in worldwide data center capital expenditure, showing a remarkable 59% rise year-over-year during the third quarter of 2025. This surge marks the eighth consecutive quarter of double-digit growth, driven largely by continued investments in artificial intelligence (AI) technologies. As leading companies in the cloud services sector enhance their deployment strategies, the demand for data center infrastructure has skyrocketed.

Contributors to Growth

The report highlights that the top four cloud service providers in the US—Amazon, Google, Meta, and Microsoft—are raising their capital expenditure expectations for 2025. This aggressive investment strategy is fueled not only by AI technologies but also by general-purpose infrastructure expansion. Notably, Oracle is poised to double its data center capital expenditure this year as it develops its Stargate project.

Baron Fung, Senior Research Director at Dell'Oro Group, noted, “What distinguishes this cycle is the expanding scope of investment. Cloud providers are scaling not only accelerated compute capabilities but also general-purpose servers and the necessary infrastructure required to deploy AI at a production level.”

Acceleration of Server Spending

Accelerated server demand showed striking growth within the quarter, primarily due to the rollout of NVIDIA’s Blackwell Ultra architecture and custom accelerator platforms across US hyperscalers. These advancements are critical as a growing number of companies are now investing in sovereign AI deployments. At the same time, cloud providers are placing greater emphasis on capex discipline, optimizing asset depreciation and lifecycles in pursuit of steady cash flow.

Highlights from Q3 2025 Data Center IT Capex Report

• - The global outlook for data center capital expenditure was Revised upwards through 2026, mainly due to sustained hyperscale investments and ongoing prioritization of AI infrastructure.
• - Demand for general-purpose servers saw a robust increase as cloud providers expanded their compute and storage capacities to support enhanced cloud services and intensive AI workloads.
• - Dell solidified its position, leading all server original equipment manufacturers (OEMs) in revenue, closely followed by HPE and Lenovo, backed by strong shipments of NVIDIA Blackwell and an updated x86 portfolio. Meanwhile, white-box vendors managed to secure the majority of server shipments, bolstered by heightened demand from hyperscale AI deployments.

About the Report

Dell'Oro Group’s Data Center IT Capex Quarterly Report offers a detailed analysis of capital expenditures across data center infrastructure, focusing on the ten largest cloud service providers, along with insights from the Rest-of-Cloud, Teleco, and Enterprise customer segments. This report allocates data center expenditures across general-purpose and accelerated servers, storage systems, and ancillary equipment while discussing prevalent market trends and the motivators behind capex growth during the quarter.

Conclusion

The escalating investments highlight a critical shift in the technology landscape, where companies are adapting to the AI era by significantly enhancing their infrastructure. The implications of this trend are far-reaching, hinting at robust market evolution in the face of technological advancements in AI and data utilization.