Data Center Colocation Market

The data center colocation market is projected to reach USD 222.97 billion by 2031 from an estimated USD 124.47 billion in 2026, at a CAGR of 12.4% during 2026–2031. The increasing demand for high-density artificial intelligence (AI) and high-performance computing (HPC) workloads is making power and cooling capacity, rather than just rack space, a key differentiator. Enterprises now need liquid-cooled environments that can support 40-60 kW per rack. Additionally, hybrid-multi-cloud interconnection ecosystems have become essential, providing low-latency Layer-2 connectivity that spans on-premises facilities, colocation centers, and various cloud regions. This setup enables efficient, high-performance data movement for AI applications. Evolving data sovereignty regulations in Europe, India, and Australia are accelerating investment in compliant, jurisdiction-secure hosting facilities that command premium pricing and extended contracts.

Some of the major players in the data center colocation market include Equinix (US), Digital Realty (US), NTT DATA (Japan), QTS Data Centers (US), and KDDI Corporation (Japan). These companies use and provide colocation services to move fast, innovate, and stay connected with customers worldwide. It helps them harness AI, manage massive data, and create smarter, more seamless experiences, such as recommending shows, processing payments, or running voice assistants. Colocation services give them the flexibility and power to keep evolving and delivering at scale.

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In August 2026, NTT DATA announced plans to expand its global data center capacity from approximately 2 GW to approximately 4 GW by FY2030. The company currently operates about 275 data centers globally and plans to expand to about 340 facilities, supported by continued investment in cloud and AI inference infrastructure.
In June 2026, Equinix inaugurated the HK6 data center in Hong Kong. The facility is equipped with liquid-cooling technology to support AI workloads and received an initial investment of USD 124 million. HK6 provides 1,000 cabinets in its first phase and is expected to scale to 3,550 cabinets at full build-out.

EQUINIX

Equinix is a global digital infrastructure company specializing in interconnected colocation services and data center solutions, operating a broad network of International Business Exchange (IBX) data centers across major global markets. The company connects enterprises, cloud and network providers through its carrier-neutral facilities and digital services, including Equinix Fabric. Its strategy focuses on supporting hybrid multi-cloud architectures, direct interconnection, AI infrastructure, high-density deployments, and data sovereignty requirements. Equinix is also expanding its AI workload capabilities through liquid cooling and high-density infrastructure. In April 2026, the company opened MB3 in Mumbai, its fourth IBX data center in the city, with liquid-cooling capability and an initial investment of more than USD 95 million. In June 2026, Equinix opened HK6 in Hong Kong with liquid-cooling technology, an initial investment of USD 124 million, and 1,000 cabinets in its first phase. The company also continues to develop AI-focused ecosystems through collaborations with technology providers, supporting enterprises deploying AI across hybrid and multi-cloud environments.

DIGITAL REALTY

Digital Realty is a global provider of carrier-neutral data centers, colocation, and interconnection services, supporting enterprises, cloud providers, hyperscalers, and other digital infrastructure users through its PlatformDIGITAL ecosystem. The company operates more than 300 data centers across 55+ metros and 30+ countries, providing connected infrastructure for cloud adoption, digital transformation, AI, and high-performance computing workloads. Its strategy centers on expanding capacity in major digital hubs while strengthening interconnection, energy efficiency, and sustainable infrastructure. Digital Realty is increasing its focus on AI-ready facilities that can accommodate growing power and connectivity requirements. In August 2026, the company was selected to develop 50 MW of new data center capacity at Jurong Island in Singapore under the country’s second Data Center Call for Applications. The planned facility is designed to support AI inference, high-performance computing, and enterprise workloads, with more than 50% of its capacity expected to be powered through green energy pathways. The development expands Digital Realty’s existing Singapore platform and strengthens its regional AI infrastructure capabilities.

Market Ranking

In 2026, the data center colocation market remained highly competitive, with Equinix, Digital Realty, NTT DATA, KDDI, and QTS Data Centers maintaining significant global footprints. Equinix continues to strengthen its position by expanding its interconnected IBX footprint and developing AI-ready facilities, including the HK6 facility in Hong Kong, which incorporates liquid-cooling capabilities for high-density AI workloads. Digital Realty continues to expand its global PlatformDIGITAL footprint through new capacity and strategic infrastructure investments, including its planned 50 MW facility in Singapore. NTT DATA is expanding its global data center platform and has announced plans to increase capacity from approximately 2 GW to approximately 4 GW by FY2030. KDDI is developing infrastructure focused on distributed computing and AI workloads, while QTS continues to expand its US data center portfolio to support hyperscale, cloud, and AI requirements. These developments reflect continued investment by leading providers in scalable capacity, strategic geographic expansion, and infrastructure designed for evolving enterprise and hyperscale requirements. AI infrastructure requirements, power availability, high-density deployments, advanced cooling, connectivity, and geographic reach increasingly shape the competitive landscape. Leading colocation providers are therefore expanding their facilities while adapting existing infrastructure to accommodate higher-density workloads and changing customer requirements. The ability to provide interconnected facilities, scalable power capacity, liquid-cooling capabilities, and access to cloud and network ecosystems is becoming increasingly important as enterprises, hyperscalers, and AI infrastructure providers rely more on third-party data center facilities.

Related Reports:

Data Center Colocation Market by Service Type (Traditional, Managed), Service Scale (Retail, Wholesale), Workload Type (General Purpose IT, HPC & AI), End User (Enterprises and Hyperscalers) with Impact of AI/GenAI - Global Forecast to 2031

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