When we talked about the data center industry in late 2024, little did we know that the market would soon be hitting $348 billion by the end of the year. In fact, in the United State, the market is projected to reach $172 billion in 2025 and is racing toward $245 billion by 2030, according to market data specialist Statista. What’s driving this explosive growth? Artificial intelligence. The U.S. is expected to be the fastest-growing market for data centers, growing from 25 GW of demand in 2024 to more than 80 GW of demand in 2030, as reported by McKinsey. Data centers have created the largest infrastructure buildout since America’s interstate highway system.

Beyond server farms, the data center industry is spawning entire ecosystems of specialized businesses, from floating data centers to electronic waste recyclers, creating investment opportunities that most dealmakers haven’t even discovered yet. 

To gauge this sector’s growth since last year, we turned to our platform to see how the companies from our previous blog are performing today. 

Subindustry Explosion

A recent report by Datacenters.com reveals just how many niche markets are flourishing within the data center ecosystem. The supporting industries read like a who’s who of modern infrastructure: modular construction, specialty insurance, cybersecurity, cooling systems, power management, and even electronic waste recycling. Each represents a different angle on the same massive opportunity.

Take modular and pre-fabricated data centers, for instance. Companies like Data Center Delivered in New York and the intriguingly named ServerDomes in Portland are building facilities that can be deployed faster than traditional construction. Even more fascinating, Nautilus Data Technologies in California has figured out how to make floating data centers work, literally building on water to solve cooling and real estate challenges simultaneously.

What makes this particularly interesting for investors is that these companies are almost entirely private. Data Center Delivered, founded in 2011 with 51-100 employees, provides a full suite of modular data center solutions that are customizable and scalable. ServerDomes, despite having only 1-10 employees since 2014, eliminates heating issues caused by the physical structure of data centers by utilizing an architectural design in the shape of a geodesic dome.

Specialized Insurance

With the risks being too unique, too complex, and too expensive when things go wrong, you can’t insure a data center with regular business insurance. A single data breach or power failure can cost millions, creating demand for specialty insurance providers who understand these specific risks.

Companies like Insureon (a subsidiary of Hub International) and BiBerk (owned by Berkshire Hathaway) are building substantial businesses around data center insurance. At-Bay, the San Francisco startup founded in 2016, has reached unicorn status with 251-500 employees. When Warren Buffett’s company and major private equity firms are building positions in data center insurance, that’s usually a signal worth following.

The revenue numbers back up the excitement. Recent quarterly results show CNA Financial pulling in $14.65 billion, up from $3.6 billion last year. Kemper at $4.79 billion, and Arthur J Gallagher hitting $12.43 billion in our most recent research. These aren’t small businesses anymore.

The Innovation Engine

The second wave of data center evolution focuses on the infrastructure needed to power AI and machine learning applications. JLL’s global outlook expects data center storage capacity to grow from 10.1 zettabytes in 2023 to 21.0 ZB in 2027, for a five-year compound annual growth rate of 18.5%. While traditional CPUs run at 150-200 watts per chip, 2024’s next-generation AI chips are expected to run at 1,200 watts, creating entirely new infrastructure requirements.

This transformation is creating winners across multiple categories. In security, companies like Honeywell, Fortinet, and Palo Alto Networks are building sophisticated systems that combine physical and cyber protection. Honeywell’s recent investment patterns show deal sizes increasing exponentially, suggesting major expansion in this space.

For AI infrastructure, Nvidia continues dominating with a portfolio of 278 companies and a median investment size of $62.7 million, up from $55 million last year. Their co-investor roster reads like a who’s who of AI, including high-profile investments like OpenAI. GPU cloud provider CoreWeave had approximately 45,000 GPUs by July 2024 and now operates in 33 locations in North America and Europe.

Cooling Crisis to Investment Opportunity

AI is projected by Goldman Sachs to drive a 165% increase in data center power demand by 2030, and all that power generates heat. Traditional air cooling can’t handle the thermal loads of AI-optimized data centers, creating demand for advanced cooling solutions.

Vertiv, Schneider Electric, and Johnson Controls are leading this transformation with adaptive thermal management systems and integrated cooling solutions. Schneider Electric alone commands a $142.61 billion enterprise value with $1.6 million in total funding and 112 strategic acquisitions focused on digital energy management.

The cooling challenge isn’t just technical but economic. Efficient cooling systems cut operational costs, extend equipment life, and improve sustainability metrics that increasingly matter to corporate clients and regulators.

One-Stop Shop for Dealmakers

For private equity firms and investment bankers looking to capitalize on the data center industry boom, traditional research methods can’t keep pace with this rapidly evolving landscape. Our comprehensive AI-powered platform transforms how dealmakers identify and evaluate opportunities across these emerging subindustries.

Our deal sourcing and discovery tool, Finder, enables investors to discover hidden gems like floating data center companies or specialty insurance providers before they hit the mainstream radar. And Acquirer helps identify bolt-on acquisition targets across the fragmented data center ecosystem.

With access to over 30 million company profiles and advanced AI analytics, our platform provides the intelligence needed to navigate this complex, fast-moving industry. For firms ready to capitalize on the data center revolution, having the right tools for deal sourcing and market intelligence isn’t just helpful but essential for success in this $348 billion opportunity.

Reach out to us to learn more about how to search for deals faster and smarter.