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The GCC data centre market continues to grow at pace in 2025, but our latest Q1 2025 GCC Data Centre Survey Report reveals an important shift in sentiment: while demand for hyperscale and edge infrastructure is surging, confidence in colocation might be softening.
When asked which sector faces the most acute under-supply risk, 53% of respondents pointed to hyperscale AI, followed by hyperscale cloud at 20%, and edge at 15%. Only 7% identified colocation as under-supplied – an indicator that market sentiment is cooling around traditional colocation models.
Conversely, 36% of respondents now view colocation as the most over-supplied sector in the market, compared to just 6% for hyperscale AI, 18% for hyperscale cloud, and 9% for edge. These figures suggest a clear pivot in demand: as hyperscalers expand into both AI/cloud and edge, the traditional role of colocation providers is being redefined.
This possible re-evaluation is also shaped by operational realities. Power availability, grid reliability, and rising energy costs continue to pose risks to long-term colocation viability. At the same time, growing ESG pressures are raising expectations around sustainability and efficiency.
As hyperscalers lead infrastructure development and demand becomes more workload-specific, colocation providers face a critical inflection point. Flexibility, innovation, and a shift toward more specialised infrastructure will be key to remaining competitive in a rapidly evolving market.
This article highlights one of the key topics featured in our Q1 2025 GCC Data Centre Survey Report: are we witnessing a shift in market sentiment? Is traditional colocation losing its position in a market racing toward hyperscale AI/cloud and edge? As demand shifts and operational pressures mount, can colocation providers evolve fast enough?
We invited industry professionals to share their views anonymously – and here is what they had to say. The latest insights reveal how the region’s data centre landscape is evolving – and where it might be headed next.
If you found the Survey Report valuable and want to help shape the conversation around the GCC’s data centre market, have your say – our Q2 Survey goes live on July 1st!
Read the full Survey Report here!
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Want more insights on the GCC data centre market? Keep an eye out on our Events page to see where we’ll be taking the next GDCA event, and watch out on our Publications page for the launch of our latest reports.