The global cloud and data centre industry has grown exponentially over the past decade, a trend that is showing no sign of stopping. The mass adoption of cloud computing and AI are driving this growth, with hyperscale and edge computing in particular grabbing investors’ attention.

While home-grown companies have risen to meet demand, foreign capital is also also heavily involved in the setting up of global cloud and data centre infrastructure. The leading sources of such greenfield investment are Amazon; Japan’s Nippon Telegraph & Telephone (NTT); US web infrastructure and security company Cloudflare; Alphabet; Microsoft; and US co-location data centre provider Equinix (in that exact order).

NTT has been responsible for some of the largest data centre projects on record, such as its $1.5bn (Y223.6bn) data centre project in India in 2020, followed by a massive €850m (Y133.83bn) investment in Frankfurt, Germany, the year after.

These locations are very telling, as India has been the most popular destination for foreign direct investment (FDI) projects in the global cloud and data centre sector, followed by Germany and then South Africa, according to exclusive data provided by GlobalData.

"India is one of the most recent success stories in FDI, with greenfield investments skyrocketing, particularly in software-related projects," says Glenn Barklie, chief economist at Investment Monitor. "It also has a large population who use internet services, and the number is growing. The country is second only to China in this regard. Foreign companies are tapping into the huge rise in demand for data centre capacity in the country."

The rise of data centre investments are, of course, linked to the growth in the digital economy, with physical infrastructure being essential for the next wave of technologies.

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“India’s surging data consumption and increasing demand for information technology solutions are rapidly growing, yet the country still maintains one of the world’s lowest data centre densities," says Koushan Das, manager at Dezan Shira & Associates. "This makes it a high-growth priority for the Indian central and state governments, which means foreign investors and data centre enterprises will be able to tap greenfield market opportunities and incentives.”

Meanwhile, Germany's FDI boom in data centres is tied to a pan-European surge that is very active to this day. In the second quarter of 2023, there was a veritable gold rush in data centre demand in Europe (making it the largest second quarter on record) with 114MW of take-up across Europe’s key markets: Frankfurt, London, Amsterdam, Paris and Dublin, according to JLL’s latest EMEA Data Centres Q2 2023 report.  

A key part of this drive was the recent news that AustralianSuper, Australia's largest pension fund, is to buy a minority stake in a major European data centre business for $1.6bn (A$2.51bn). The London market will remain a crucial part of this wave, as recently reported by Investment Monitor.