Global data center capital expenditures are on track to exceed $1 trillion in 2026 as hyperscalers accelerate AI infrastructure deployments and memory pricing inflation raises the cost of server systems, according to a new report from Dell’Oro Group. The research firm increased its 2026 forecast following stronger-than-expected spending in the first quarter.
Dell’Oro said the four largest U.S. cloud providers—Amazon, Google, Meta and Microsoft—increased data center capital expenditures by 78% year-over-year during the quarter. Alongside investments in AI clusters, hyperscalers continued expanding general-purpose cloud infrastructure to support public cloud growth, agentic AI workloads, and rapidly growing storage requirements associated with AI applications.
The report projects spending growth will accelerate further in the second half of 2026 as NVIDIA Rubin-based systems enter production deployments and hyperscalers refresh custom AI accelerator platforms. Dell’Oro also noted that rising memory and storage costs significantly increased server pricing during the quarter, creating an additional driver for overall capex growth beyond the expansion of physical infrastructure.
• Dell’Oro now forecasts global data center capex will exceed $1 trillion in 2026.
• Amazon, Google, Meta and Microsoft increased capex by 78% in 1Q26.
• Rising DRAM and storage prices contributed significantly to server cost increases.
• NVIDIA Rubin deployments are expected to accelerate spending in 2H26.
• Hyperscalers continue investing in both AI infrastructure and general-purpose cloud capacity.
• Enterprise and sovereign cloud AI adoption is growing, though deployment challenges remain.
“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,” said Baron Fung, Senior Research Director at Dell’Oro Group. “At the same time, AI infrastructure deployments continue to accelerate rapidly, while hyperscalers also expanded general-purpose infrastructure to support public cloud growth, agentic AI workloads, and rising AI-related storage requirements.”
🌐 Analysis: The most notable aspect of Dell’Oro’s forecast is that AI infrastructure is no longer the sole driver of data center spending growth. Memory inflation, storage expansion, networking upgrades, power infrastructure, and general-purpose cloud capacity are all contributing to rising capital expenditures. AI training clusters require significantly more DRAM, HBM, SSD capacity, switching infrastructure, optical interconnects and power delivery equipment than previous generations of cloud infrastructure, amplifying spending across the entire supply chain.
The projected Rubin ramp in the second half of 2026 aligns with broader industry expectations for another major upgrade cycle across hyperscale AI environments. NVIDIA’s Rubin platform is expected to drive new deployments of advanced GPUs, HBM memory, high-speed networking fabrics, optical interconnects and liquid-cooled rack infrastructure. The report also reinforces recent earnings commentary from major cloud providers, which continue to signal sustained AI-related capital investment despite growing scrutiny around AI monetization and infrastructure utilization rates.
