The folks at Apollo have a new graph out showing a sharp data center growth slowdown from a peak two years ago. What should we make of it? Is the bubble already bursting?
My comments:
- Post-COVID Base Effects
The slowdown in the graph is largely due to post-pandemic comparables. Data center construction froze in 2020–21, then surged again as delayed projects restarted. This, in turn, increased the 2022–23 spending growth, which made the post-2023 “decline” more dramatic.
- Data Centers Still Expanding Rapidly
Even at ~30–40% YoY by mid-2025, growth remains very high relative to other sectors. It is more accurately described as a slowing from a post-pandemic surge. and definitely not a contraction.
- Supply-Chain and Cost Distortions