More than a quarter of foreign data centre investments over the past two decades have been made by just five companies, including US tech giants Amazon, Alphabet and Microsoft, according to figures from greenfield investment monitor fDi Markets.

Foreign direct investment (FDI) into data processing, hosting and related services gained greater momentum during the pandemic, as the demand for cloud infrastructure surged and the tech giants scaled operations in both data centres and cloud computing.

Data centres can either be owned and operated by large companies or by colocation providers which rent out servers and equipment to companies. Large-scale facilities which manage immense amounts of data are known as hyperscale data centres, typically operated by tech giants like Amazon and Google.

In 2021, FDI into data centres reached a peak of $47.6bn, with Amazon’s subsidiary Amazon Web Services (AWS) making multi-billion dollar investments in a new data centre infrastructure region in New Zealand and a new cloud computing hub in Canada — both of which were aimed at serving domestic markets. FDI into data centres maintained its momentum in 2022 also, with projects worth $44.8bn announced worldwide.

Who are the top data centre investors?

Amazon has massively expanded its data centre network as the wave of digitalisation and demand for cloud computing catalysed by the pandemic continues to grow. More than 75% of its total planned investment over the past two decades was announced between 2020 and 2022, fDi figures show. The company’s share of global data centre FDI quadrupled from 8.4% to 35% between 2019 and 2022.

This momentum has continued into this year. In January, AWS said it will invest $35bn by 2040 to establish multiple data centre campuses across the US state of Virginia, as sales and tax exemptions were rolled out for investors in a bid to bolster its Data Center Valley.

Besides AWS, the next five largest investors were Japanese telecom company Nippon Telegraph & Telephone (NTT); US web infrastructure and security company Cloudflare; Google’s parent company Alphabet; fellow tech giant Microsoft; and US colocation data centre provider Equinix. 

NTT was the second-biggest overseas greenfield investor between 2003 and 2022. The company has established itself as one of the biggest global co-location data centre providers through its subsidiary NTT Communications. Its biggest announcement to-date is was its plans to invest $1.5bn in data centre projects in India in 2020, followed by a €850m investment in Frankfurt, Germany, in 2021. 

The majority of US-based Alphabet’s tracked data centre investments have been through its subsidiary, Google, which ranks the third-most active data centre investor over the past two decades. Google’s largest recorded investment was to establish a cloud region in Warsaw, Poland, in 2020, worth up to $2bn. Domestically, Alphabet’s biggest data centre investment was a $1bn data centre expansion in Ohio, through its subsidiary Montauk Innovations in 2021, according to fDi Markets.

Web infrastructure and security company Cloudflare ranks the fourth-biggest investor in this sector. Ranked as one of the most active foreign investors overall in 2018 by fDi Markets, Cloudflare’s expansion has not ceased, with the company recording more greenfield data centre projects than any other in 2021. Meanwhile, US tech giant Microsoft takes fifth place; its largest investment to-date is a $2.7bn data centre in the Netherlands from 2013. 

The world’s biggest colocation provider, Equinix, ranks sixth in terms of capital investment. It has tracked the second-highest number of greenfield projects (135) after Amazon (185) over the past two decades. Yet, unlike the Big Tech hyperscalers, the company dedicated less capital to each project, with an average capital expenditure of less than $100m per project.

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Where are they investing?

As for the regional spread of FDI into data centres, North America has grown significantly over the course of the pandemic, as its market share rose from 11.2% in 2019 to 18.1% in 2022. Yet fDi Markets data shows that the share of North American in the global data centre market has hovered between 30% and 36% over the same period, when including US interstate investments. 

Over the past two decades, Europe has dominated the data centre market, while the Asia-Pacific region has caught up, doubling from around 15% share of global data centre FDI in 2003 to 30% in 2022. With a mixture of mature and growing markets, an increasing number of companies are investing to serve the growing demand for cloud computing in the Asia-Pacific region.

Singapore-based colocation provider Digital Edge, which already ranks in fDi’s top 20 data centre investors after being founded in 2020, made the second- and third-largest investments tracked in 2022 into India and South Korea, respectively. This followed Amazon’s $5bn investment in Thailand in October.