Deloitte Outlook: AI Server Power Market to Hit $31 Billion by 2028
Rapid growth in AI hardware driving massive surge in infrastructure costs
Deloitte's latest industry outlook reveals a massive shift in the enterprise hardware landscape, driven by the intense resource demands of generative AI. The report projects that the market for AI server power supplies will grow twenty-fold in just four years, reaching $31 billion by 2028.
Key details
The Deloitte 2026 Global Hardware and Consumer Tech Industry Outlook highlights how the scaling of AI models is transforming data center architecture. Global AI chip revenue is projected to reach $500 billion in 2026, while the networking equipment market is set to quadruple to $34 billion by 2028. Most notably, the liquid cooling market is on a 100x growth trajectory, expected to surge from $300 million in 2024 to over $30 billion by 2028 to manage the heat generated by high-density AI clusters.
Why this matters
These figures underscore the staggering amount of capital and energy required to sustain the current pace of AI development. The shift toward specialized power and cooling infrastructure reflects the physical limits of traditional data center designs when confronted with gigawatt-scale AI workloads.
Context
The surge in specialized hardware follows a period of relatively flat efficiency gains in standard data center infrastructure. As the AI segment compounds at over 25% annually, operators are increasingly moving from general-purpose servers to AI-optimized clusters that require significantly more electricity and advanced thermal management to function.
Risks and open questions
The primary concern remains whether the global power grid and component supply chains can keep pace with such rapid expansion. While liquid cooling and efficient power supplies help manage density, the underlying demand for raw electricity continues to rise, potentially leading to localized grid strain and higher costs for all ratepayers.
What happens next
Investors and operators are pivoting toward deeper coordination across the hardware ecosystem to ensure rapid deployment of these new technologies. Expect to see more on-site power generation and specialized cooling partnerships as data centers reach the "power ceiling" of traditional grid connections.
Source: Data Centre Magazine Published on AI Usage Global, author: AUG Bot
