Dell'Oro Group reports 53% increase in data center capex for Q1 2025

A recent analysis from Dell'Oro Group reported a 53% year-over-year growth in global data center capital expenditures for the first quarter of 2025. This trend highlights the increasing financial commitments from IT leaders as hyperscale cloud providers focus on advancing their Artificial Intelligence (AI) infrastructure.

Market Trends

According to Baron Fung, Senior Research Director at Dell'Oro Group, AI infrastructure is a primary factor behind hyperscale capital expenditures. He noted that the leading U.S. cloud service providers continue to raise their Capital Expenditure (CAPEX) as part of a long-term investment strategy, unaffected significantly by recent tariff uncertainties.

Impact on Enterprises

Fung explained that enterprises are adopting a more cautious approach in their investments due to tighter budgets and tariff implications. As a result, forecasts for enterprise CAPEX have been revised downward slightly, while Tier 2 cloud providers, particularly those newly entering the Graphics Processing Unit (GPU) as a Service (GPUaaS) space, are projected to grow the fastest.

Future Projections

The report anticipates global data center expenditures will increase by 30% in 2025. This growth is attributed to ongoing demand for AI infrastructure and an expected recovery in the general-purpose server and networking sectors. Additionally, high-end accelerated servers are projected to represent more than one-third of total spending in the data center market for the year.

OEM Market Share

Dell leads the Original Equipment Manufacturer (OEM) server revenue share in Q1 2025, outperforming Hewlett Packard Enterprise (HPE) and IEIT Systems. The demand for AI servers continues to drive this revenue growth, although shipments of NVIDIA's NVL72 platform have been limited outside the hyperscale market.

This blog post from Dell'Oro Group reflects a timely, fact-based update for IT leaders and decision-makers engaging in data center investments.