Produced in partnership with Blue Owl
Global data centre spending is on track to exceed $1 trillion by 2029, according to Dell’Oro Group, driven by an insatiable demand for hyperscalers to fuel AI and machine learning technologies.
Robert Hartog, who is a senior member of Blue Owl Capital’s digital infrastructure team, believes the hype is justified, with global data centre capacity up more than 200 per cent in the past decade and McKinsey predicting that usage could climb from 60 gigawatts today to up to 298 gigawatts by 2030.
Meeting this demand will require more land, capital and expertise to build more data centres and ancillary digital infrastructure, with the cost estimated to be north of $6.7 trillion globally, based on analysis by
Hartog describes the demand and supply dynamic as a “generational market opportunity.”
“Multi-trillion-dollar investment is needed for real estate, construction, IT equipment and power so the opportunity set is just massive,” he says.
“If you focus on cloud-computing alone, the growth in that market has been 20-30 per cent year on year, which is enough to build a very strong investment thesis, but then add to that AI and it significantly increases the scale of the opportunity set.”
“Hyperscaler facilities provide critical infrastructure for the roll out of cloud and AI, which is essential for society and communities to function.”
With Blue Owl’s digital infrastructure team having close to 10 years of data centre investing experience, the group is well-positioned to take advantage of the scale and capital required, and with asset owners to develop and build the digital infrastructure for the future. Blue Owl’s digital infrastructure strategy has $14 billion in assets under management across the entire digital infrastructure opportunity set from real estate and infrastructure development to credit and stabilised assets. Critically, Hartog says the ability to execute is crucial, as projects continue getting bigger, more complex and more expensive.
“If you look at the capex profiles of hyperscalers, including Microsoft, Amazon, Oracle Meta and Google, they just keep expanding globally,” he says.
“There is a massive roll out of new and ongoing projects right now and they’re just getting larger and larger.”
“Data centre development is not easy and the larger these projects get, the bigger the constraints.”
Hartog says there are constraints on capital, power, land, supply chains and construction with other considerations including backlogged utility queues, delayed transmission upgrades, and complex regulatory conditions, all of which require an experienced partner with subject matter expertise, global scale, and local presence.
From asset owner to asset manager
An M&A lawyer by background, Hartog joined Blue Owl in 2024 through the firm’s acquisition of global alternatives manager, IPI Partners.
During his time as managing director of IPI Partners, the group grew to become one of the largest private data centre investors.
Prior to that, Hartog was the head of communication infrastructure investments at the €251 billion Dutch pension fund, PGGM and he describes the transition from asset owner to asset manager as an “extension of activities.”
“At PGGM my role was to find suitable digital infrastructure assets around the world, including telecommunications towers, data centres and fibre networks, and my work at Blue Owl builds on that,” he says.
“The data centre industry, especially the hyperscale data centre industry, is very interesting for institutional asset owners because of the long-term contracts and stable cashflows.”
Institutional clients have different participant pools, liabilities and time horizons, making it difficult to make a blanket statement about the ideal allocation to digital infrastructure, Hartog says.
“For long-term institutional investors, digital infrastructure and hyperscalers, in particular, can offer the benefits of risk-adjusted returns and capital preservation. We focus on resilient, long-lived facilities with long-term contracts and high credit rated tenants, which underpins stable, predictable cashflows,” he says.
Not all data centre developers are created equal
But no matter how favourable the macro thematic tailwinds, hyperscaler investments – like any investment – carry risks, including counterparty risk and development risk.
To help manage risk, investors can work with a manager with a track record of delivering large-scale projects.
“Ultimately, we are developing hyperscale facilities together with our hyperscale tenants, and they are relying on our capability to deliver on schedule, on budget, as per the specs,” he says.
“That means having the required land and permits and ensuring our supply chains can deliver all the necessary equipment and power. Scale is critical to be able to purchase equipment and items ahead of time, and engage large contractors, because there is a limited amount of time to deliver these projects.”
For established players with capital and experience, these challenges spell opportunity, according to Hartog.
“Projects are flowing to new markets that can offer energy resources and infrastructure advantages, which creates jobs and spreads economic development,” he says.
“Over the last decade, we’ve built a business focused on meeting the needs of hyperscalers. Our team is dedicated to solving problems for our tenants and providing them with the infrastructure and real estate they need for the roll-out of their product to the end-users. We’ve built a vertically integrated operating platform with specialised resources in local markets across the world to help address the challenges they are facing.”
These value-added services include site selection, securing alternative power solutions, coordinating land and power permits to drive developments, and engaging with the communities and regulators where we are developing.
“This doesn’t happen overnight. It has taken the better part of a decade to be this specialized and to build and acquire inhouse capabilities to address the specific challenges of delivering purpose-built hyperscale facilities.”
Blue Owl employs a range of specialists in areas like power, land acquisition and property development.
“We continue to be a strategic investor in the space and in order to deliver we need to make sure that we have the right capability sets inhouse, which is why we have power specialists who really understand the grid and the transmission and distribution challenges,” Hartog says.
“We have people who specialise in land acquisition strategies and developing sites into data centres. These are skill sets that are needed to continue to deploy assets in this space.”
While the opportunity for data centres and digital infrastructure may indeed be generational, Hartog believes that managers with the right skill set, expertise, hyperscaler relationships, community presence, scale, and proven ability to execute will be positioned to deliver.
Source: Bloomberg New Energy Finance (BNEF), “Data Center Market Overview”, June 2025.
