With hyperscalers projected to spend over $320 billion combined in 2025 cap-x (1), the investment community has focused almost exclusively on this high-profile segment. However, this laser focus on “bright and shiny” hyperscale spending risks overlooking a compelling parallel trend in enterprise demand.

 

 

The magnitude of hyperscale projects has grown exponentially. Five years ago, when I was covering this sector as an analyst, a 30 megawatt hyperscale deal qualified as “really big.” Today, Fermi America is constructing an Advanced Energy Intelligent Campus near Amarillo, Texas, with power capacity reaching 11 gigawatts – a 300x increase that illustrates just how dramatically the landscape has shifted.

 

 

This week’s  hyperscaler earnings prints underscore this trajectory. Microsoft announced $30 billion in capex for the current quarter alone, while Meta projected 2025 capex could reach $72 billion. 

 

 

While most of this hyperscale spend is centered around the buildout of continued AI infrastructure, a theme which is not being focused on enough is the also robust and ever-increasing demand from enterprise customers. “Data” points are all around us here.   

 

 

The enterprise TAM continues to expand. According to Gartner, enterprise IT spending on data center systems is forecasted to exceed $230 billion.

 

 

In a recent interview, DataBank CEO Raul Martynek indicated as of June it had already achieved 185% of its sales targets.  While DataBank also services the hyperscale space – its core roots came from the enterprise side.  The company credited the majority of this recent sales beat to enterprise demand growth. Specifically, DataBank is seeing enterprise orders in the 3-9MW range.  This compares to ~18 months ago when the “typical” enterprise order size was 1-2MW.   Just this past quarter, DataBank signed its largest enterprise order in its history.

 

 

This thesis is also playing out in other models.  Flexential, ValorC3 and DartPoints have all spoken to strong momentum in the enterprise segment.  With all these players now having deep pockets behind them (Morgan Stanley Infrastructure Partners, DIF and Nova Infrastructure, respectively) these models are well positioned to lean in and widen their enterprise net.   Enterprise growing demand was also confirmed by one of the largest enterprise data center platforms – Equinix.  On its Q2’25 earnings call just this week, Equinix’ CEO noted: “…we are seeing from our enterprise customers a larger footprint requirement…as they look to embrace the opportunities for their businesses afforded by AI and its capabilities.”

 

 

The enterprise migration we are seeing today is a structural – not cyclical – one.

 

 

While enterprises are indeed in early stages of AI adoption, the immediate catalyst driving demand is more fundamental: legacy SAP and ERP system migrations from aging on-premise infrastructure.

 

 

The economics are clear. As ValorC3’s CEO bluntly stated: “There’s not a CFO in the world today who wants to own corporate data centers, much less build one that is really modern in its capability and future-proofed. Friends don’t let friends build data centers. If you are an enterprise, don’t build a corporate data center in this day and age.” (Data Center Dynamics interview – June 2025)

 

 

The numbers support this view (2) 

 

 

• The mean age of enterprise data centers exceeds 11 years
• Over 50% of enterprises have consolidated or migrated legacy facilities to modern colocation or cloud-adjacent data centers in the past five years
• New requirements in terms of power density and cooling are only further driving up the cost to build

 

 

Enterprises have seemed to get the memo.  They understand that their core competency and focus is  not and should not be toward building and owning data centers – but rather to rely on third party models to do so. This shift is particularly pronounced in finance, healthcare, manufacturing, and energy sectors.

 

 

As enterprise order sizes continue to expand, data center platforms courting this segment now face a significantly more open competitive field than the increasingly crowded hyperscale segment. The convergence of aging infrastructure, modern workload requirements, and capital allocation preferences creates a compelling tailwind that shows no signs of abating.

 

 

For investors and operators willing to look beyond the hyperscale headlines, data center platforms courting the enterprise space present an opportunity hiding in plain sight.

 

 

SOURCES: 

 

 

(1)    Company reports / earnings releases 

 

 

(2) – CBRE