How infrastructure is driving our digital world

The digital infrastructure landscape plays a critical role in supporting modern economies and societies, enabling connectivity, data transfer, and technological advancements. The immediate need for developments in the data center space is apparent, but the scope extends much further. Connectivity between computing and storage facilities, as well as the end users and their devices, must evolve in tandem with renewable power capacity and networks to support these installations. The global AI market alone was estimated at USD 196.63 billion in 2023, projected to grow at a CAGR of 36.6% from 2024 to 2030¹ showing the extent of the current digital transformation.

Recently, we have witnessed significant developments across digital infrastructure presenting various investment opportunities. This includes wireless and fixed communication network infrastructure, with particular emphasis on the data center space and its adjacent areas. The acceleration of AI and machine learning, together with cloud adoption, has been a major driver of this growth, creating vast demand for computing power and storage across diverse applications incl. both large scale core hyperscale facilities as well as latency sensitive installations on the “edge”, that are closer to the customer. While the release of DeepSeek‘s R1 model has drawn considerable attention, most maintain that the need for substantial AI-related investment remains. Both Microsoft and Meta have recently re-iterated their commitments to AI-related spending. In addition, if DeepSeek’s model does prove to be considerably more cost-effective, it could accelerate the widespread adoption of AI applications, given new and improved business cases. This in turn would also necessitate further investments in infrastructure required to support AI inference (the processing of user requests by trained AI models).

One question that also ChatGPT (or DeepSeek) cannot answer (yet) is which individual technology and application areas will ultimately prevail. Here, regional differences in the possibilities and individual willingness to adopt new technologies are also significant. While Asia and Africa tend to be more open to new technologies, some parts of Europe lag in implementing innovations but put greater emphasis on data privacy and protection aspects. Today, the majority of investments in digital infrastructure is made in Europe (c.30%)² , North America (c.45%)² , and parts of the Asia-Pacific region (c.20%)² . A focus was here in particular on data centers which accounted for almost 60%² of deal volumes in 2024. This trend is expected to continue in 2025, with ongoing investment in data centers (despite recent noise). However, opportunities are also anticipated in other subsectors. According to the European Commission’s 2024 Digital Decade report, only 64%³ of households have access to fiber and coverage of high quality 5G extends only to merely 50%³ of the EU territory (based on main pioneer band). The investment needed to reach connectivity targets amounts up to EUR 200 billion.³

Be it a video conference, working remotely or streaming in the evening – more Digitisation requires more energy. In light of these developments, there has been a notable shift towards incorporating sustainability considerations into the design and development of digital infrastructure. The issue of high energy consumption and carbon footprints remains a concern as the demand for digital services continues to grow at a rapid pace. There is a growing emphasis on transitioning to renewable energy sources and implementing climate-friendly cooling solutions for data centers. This focus on sustainability aligns with broader trends in decarbonisation and digitalisation, highlighting the need for infrastructure investments to meet rising energy demands. As operators and customers of digital infrastructure seek environmentally friendly solutions while competing with other sectors like energy and transportation in terms of decarbonisation efforts, addressing these challenges becomes more and more important. One way to tackle this environmental challenge that companies such as Google or Amazon pursue is to have agreements with renewable energy providers to supply them with green energy. Another way is to further develop cooling and other energy efficiency measures which could lead to further investment opportunities.

¹ Artificial Intelligence Market Size, Share, Growth Report 2030 (grandviewresearch.com)
² Inframation, based on global deal volumes for digital infrastructure in 2024
³ European Commission: 2030 digital decade report on the state of the digital decade 2024
⁴ Digital Progress and Trends Report, World Bank Group. Digital Progress and Trends Report 2023 (worldbank.org)
⁵ Study by Prof. Dr.-Ing. Kristof Obermann, Technical University of Central Hesse, commissioned by BREKO. Glasfaser ist die digitale Infrastruktur mit dem geringsten Stromverbrauch (brekoverband.de)

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