Data centre investments could reach $3tn in five years: Moody’s report

According to Moody’s Ratings Data Centers Global Outlook 2026 report, this level of spending is for businesses to keep pace with rapid data centre and AI-driven capacity growth fuelled by hyperscaler investments.

The report stated that spending by the six major hyperscalers (Microsoft, Amazon, Alphabet, Oracle, Meta and CoreWeave) are expected to lead the investment surge as they face more demand for data centres and their power requirements.

Combined, they are projected to reach $500 billion in data centres this year alone, as capacity growth continues. Investment is currently on track to reach $600 billion in 2027.

Moody’s suggested that this significant influx of capital will support the AI and cloud computing boom, with investment covering servers, computing equipment, data centre facilities and new power capacity.

The investment will also be needed to keep pace with projected data centre capacity growth, which is expected to remain robust as tenants prioritise speed-to-market.

“As the number and size of data centres expand, the amount and diversity of development capital needed has increased. Banks will continue to play a major role, with institutional investors increasingly lending alongside them during construction,” Moody’s said.

Additionally, long-term leases for new hyperscale data centres will continue to be supported by the credit of the larger technology companies, despite capacity being used primarily by a start-up company like OpenAI or Anthropic, the report added.

Banks will maintain a “prominent role” in the provision of financing, but Moody’s has stated that other institutional investors will participate more alongside banks, given large capital requirements.

In the US asset-backed securities market specifically, approximately $15 billion was issued in 2025, with Moody’s expecting volume to “grow considerably” this year – in part due to data centre construction loans.

Moody’s does note that the race to build new data centre capacity is still in its early stages but predicts significant global growth over the next 12 to 18 months.

However, regulatory risk and power limitations are also continuing to constrain development, the report said, as local opposition to new data centre sites has increased in some markets on account of public concern over power and water consumption.

Likewise, amid rising construction challenges, tenants are also likely to take on greater risk to “expedite completion”. Moody’s noted that high global demand for skilled labour and essential equipment inevitably increases the cost of building new data centres, in addition to increasing operating costs.

It also said that high GPU costs are now pushing developers towards alternative financing options. As the largest capital expense in AI data centre construction, Moody’s noted that GPU-as-a-Service providers that contract with large tech companies and have the most experience operating the newest GPUs are increasingly able to use them beyond their initial life cycle.

The report added: “If older GPUs can demonstrate a longer useful life, they may be able to extend and widen their financing options.”

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