The worldwide data center capital expenditure (capex) is projected to exceed $1 trillion in 2026, driven by the rapid deployment of AI infrastructure and rising costs for memory and storage components. This upward revision comes from the Dell'Oro Group, which closely monitors trends in telecommunications and data center markets.
A report released on June 10, 2026, by Dell'Oro Group indicates that hyperscale AI deployments are fueling a surge in spending as major cloud providers expand their infrastructure to meet the growing demands of AI workloads. Baron Fung, Senior Research Director at Dell'Oro Group, stated that "Rising memory and storage pricing substantially increased overall server system costs in the quarter and will likely remain a major capex growth factor this year."
The first half of 2026 has already experienced strong spending growth, with expectations for further acceleration in the latter half of the year. Notably, the anticipated rollout of NVIDIA's Rubin systems is expected to significantly contribute to this increase, along with refresh cycles for custom accelerator platforms used by hyperscale providers. Fung pointed out that while demand remains stable, the market is encountering challenges related to infrastructure readiness and uncertain returns on investment.
The report also highlights the rising capital expenditures from the top four US cloud providers—Amazon, Google, Meta, and Microsoft—which collectively increased their data center capex by 78 percent. This investment reflects a strong commitment to AI technologies and general-purpose infrastructure that supports public cloud growth and the increasing storage requirements associated with AI applications.
As the market evolves, nearly all server vendors have felt the impact of higher memory-driven pricing, with Dell leading server original equipment manufacturer (OEM) revenues in the quarter, followed closely by Supermicro and Lenovo. White-box vendors catering to the hyperscale market accounted for a substantial share of server revenue, illustrating a shift in how data centers are equipped.
The Dell'Oro Group report offers an overview of capital expenditures across major cloud service providers as well as telco and enterprise segments, detailing allocations for general-purpose and accelerated servers, storage systems, and auxiliary equipment. This data will be vital for assessing the future trajectory of the data center market.
Looking ahead, the relationship between rising costs and increasing demand for AI infrastructure will likely shape spending trends for the remainder of 2026 and beyond. As organizations adapt to the growing need for advanced AI capabilities, monitoring capex allocations and infrastructure developments will be crucial in navigating the evolving market.
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