Data centers become a 25-year refresh cycle

PwC's Global Data Centre Outlook, reported by IREI, recasts the data center trade as a 25-year refresh cycle, and the shape of that curve matters as much as its size: baseline projections call for a record $31.6 trillion in cumulative AI infrastructure investment through 2050, with annual data center capex rising from roughly $800 billion in 2026 to $1.8 trillion by 2050. Traditional infrastructure booms taper after the first build-out, whereas PwC models this one accelerating for a quarter century, so the spending arrives in repeated waves rather than a single construction push.

The engine is equipment rather than concrete: chips and other information and communication technology gear require upgrades every few years, and their share of investment moves from 70 percent in 2026 to 93 percent by 2050. That mix shift should change how real estate capital is underwritten, because the shell is the physical envelope around a constant hardware replacement cycle, and its value depends on power, connectivity, security and room to expand.

Geography narrows where that expansion can happen: the United States, central to the advanced-chip ecosystem, is projected to capture 48 percent of cumulative investment, about $15.1 trillion, while Asia Pacific accounts for $8.2 trillion, led by China and India, and sovereign AI strategies are accelerating flows into Europe and the Middle East. Those are the markets where data center land and grid capacity will be bid on most aggressively.

PwC lists five factors that will direct the flows, and names power the chief among them because affordable, reliable, low-carbon electricity at scale is the hardest requirement for many markets to deliver; connectivity, security, policy certainty, community consent and GPU access also influence where capital lands. For a real estate investor, the key line is the first one: power is the constraint that cannot be assembled on site, which is why sites with committed electricity command the premium.

That sequence extends the case this publication has made—power and land, rather than compute, are the scarce assets of the AI build-out—and PwC's baseline stretches the argument over a longer clock. If 93 percent of every dollar spent by 2050 is replacing the ICT layer, the enduring real estate position is the site and its electricity supply, and the practical call is to value data center land for multiple refresh cycles rather than a single build-out, treating the power connection as the appreciating asset. The server racks are a depreciation schedule; the site is what survives the schedule.