How the Gen AI Boom is Fuelling the Edge Data Centre Market

Technological trends like artificial intelligence (AI) and the Internet of Things (IoT) are inspiring the growth of edge IT infrastructure.

As these disruptive technologies continue to surge, they require large levels of computing power. Edge computing is therefore quickly becoming a way to optimise data centre operations and services, as edge data centres can process and analyse data faster. This is crucial for applications that require low latency or high bandwidth.

With this in mind, a recent report by global real estate company JLL finds that the global edge data centre market will become a US$317bn market by 2026. This represents a 107% growth from the 2020 market, which was valued at US$153bn at the time.

JLL highlights that the continued global rise of ‘data-dependent technologies’ like AI and IoT will require significant IT infrastructure support from edge data centres.

Edge: A data centre’s future for AI?

The company defines an edge data centre as a facility that brings computing power closer to where the data is generated or consumed.

Globally, the growth of edge computing will be influenced by not only the emergence of several technology-based megatrends, but also the need for faster data transfer and high computation. Organisations currently rely on edge data centres to process and analyse data in real-time at the edge of the network, therefore facilitating faster decision-making and more efficient operations.

Rising edge IT infrastructure focused on data centres is projected by JLL at a CAGR of 9.8% over the next five years. This comes in the wake of the company surveying data centre professionals in 2023 finding the need for low latency and high bandwidth as the most important driver for edge data centre deployments.

As a result, businesses demanding these improved services, including generative AI (Gen AI), are expected to explore edge opportunities. As Jonathan Kinsey, EMEA Lead and Global Chair, Data Centre Solutions at JLL explains, without the distribution of data processing and storage, these cutting edge digital solutions would struggle within the mainstream. 

“Consumers and corporations will continue to adapt to transformational technologies within daily life,” he says. “Edge data centres will be essential to ensure both seamless business operations in the future economy while also improving security measures and protecting against potential disruptions. 

“By lowering latency by bringing the computing infrastructure closer to the data source and user, edge IT infrastructure will become an essential component in the international economy.”

Bolstering digital resiliency 

AI continues to represent an era of disruption for the data centre industry, with business leaders having to consider how to design facilities to support the technology and keep up with customer demands. 

However, whilst tools like Gen AI are gaining significant traction, such high levels of demand has led to increased power usage. Data centres are now having to consider how to re-design or optimise facilities to keep up with demand in a more sustainable way, which is continuing to impact the market.

If used responsibly, AI could have an overwhelming impact on the industry and even work to reduce excess power consumption. Edge computing can work alongside this by processing data closer to the end user and therefore reduce overall energy use.

For instance, Meta deployed AI across their data centres with the aim of running its facilities more efficiently. 

The report by JLL finds that enterprises typically use a combination of different data centre types, including on-premises, colocation, cloud and edge, when deploying their IT infrastructure. Whilst this continual growth in data and connected devices can be enhanced by AI and IoT technologies, edge data centres will benefit further from prioritising renewable energy sources to meet demand.

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