Dublin, Beijing, and Northern Virginia all have one thing in common – sprawling hyperscale data center infrastructure

Dublin is now the world’s third-biggest location for hyperscale data centers, according to new research, ranked only behind Northern Virginia and the Greater Beijing area.

Data from Synergy Research Group shows a highly-centralized market, with just 20 state or metro markets accounting for 62% of the world’s current hyperscale data center capacity.

Northern Virginia and the Greater Beijing area make up 22% of the total, followed by Dublin at 5%, the US states of Oregon and Iowa, and then Shanghai. Of the top 20 markets, 13 are in the US, four in the APAC region, and three in Europe.

The dominance of the US, Synergy noted, is mainly down to two key factors – almost 60% of the world’s hyperscale operators are headquartered in the country, including the four biggest, while the US accounts for almost half of all cloud market revenues.

“A range of factors influence the choice of location for hyperscale infrastructure, including proximity to customers, availability and cost of real estate, availability and cost of power, networking infrastructure, ease of doing business, local financial incentives, political stability, and minimizing the impact of natural hazards,” said John Dinsdale, a chief analyst at Synergy Research Group.

“When you weigh up those factors it tends to mitigate against some of the world’s biggest economic hubs, like London and New York, while favoring some sparsely populated US states like Oregon, Iowa and Nebraska.”

The companies with the broadest data center footprint are the leading cloud providers – Amazon, Microsoft, and Google – all of which have a number of data centers overseas, as well as in their home markets. Between them, the three now account for 60% of all hyperscale data center capacity.

And it’s tech firms like these that are largely behind Ireland’s explosive increase in data center capacity over the last few years, with Google, CyrusOne, Digital Realty, Equinix, Amazon, and Microsoft all having data centers in the Dublin area.

This growth has sparked controversy, however, thanks to the enormous pressure placed on electricity grids by data center infrastructure. Figures from Ireland’s Central Statistics Office (CSO) indicate that the proportion of metered electricity consumed by data centers rose from 5% of the national total in 2015 to 18% in 2022.

Meanwhile, demand for data centers is exceeding supply across Europe, with a recent analysis by CBRE showing that there was 601MW of take-up across the 14 largest markets in Europe last year – although just 561MW of new supply was delivered during the same period.

Looking ahead, Synergy predicts that the US and China will continue to dominate, although countries including Malaysia, India, and Spain are likely to start to feature much more prominently.

Hyperscaler investment in Spain, for example, has ramped up significantly in recent months, with a host of major tech firms unveiling multi-billion dollar deals to expand infrastructure in the country.

In May, AWS announced plans to ramp up its cloud and AI infrastructure in Spain as part of a €15.7 billion investment program.

This followed a similar announcement from Microsoft in February, with the tech giant confirming plans to commit €1.9 billion in funding for AI and cloud infrastructure over the next two years.