Capital · United States

Cloud Revenue Hits $168B as AI Capacity Expands

Credited to Data Center Knowledge · datacenterknowledge.com · 9h ago

Photograph · Data Center Knowledge

Cloud infrastructure revenue reached $168 billion in the third quarter as providers brought higher-priced AI capacity online, reinforcing demand for new data centers even as power constraints slow delivery.

Cloud providers are bringing data center capacity online for higher-priced AI services as enterprise cloud infrastructure spending accelerates, reinforcing demand for construction even as power constraints complicate delivery.

Worldwide spending on cloud infrastructure services reached $168 billion in the third quarter of 2026, up 55% from a year earlier, according to a Synergy Research Group report. The market has doubled in eight quarters, and AI-specific services now account for roughly one-third of total revenue.

John Dinsdale, chief analyst at Synergy, told Data Center Knowledge that three factors are driving the surge: additional capacity coming online, higher pricing, and a continued shift toward more expensive AI services.

“A lot of the additional capacity that is coming online is specifically targeting more valuable, higher-priced AI services,” he said.

That shift in pricing and service mix helps explain how cloud revenue can grow faster than the data center capacity supporting it. JLL’s August midyear report illustrated the construction demand behind that expansion.

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Hyperscalers accounted for 59% of North American data center tenant demand, while 28 GW of owner-occupied capacity was under construction, according to JLL. Neoclouds – specialized cloud providers offering GPU-as-a-Service to enterprise customers – represented another 11% of demand, while AI companies accounted for 7%, broadening the customer base competing for facilities.

The buildout is expected to continue. Global data center capital spending is projected to exceed $3 trillion by 2030 as hyperscalers, sovereign AI programs, and specialized cloud providers expand their infrastructure to support growing AI workloads, according to an August report from Dell’Oro Group.

AI Changes the Cloud Customer Mix

The cloud market’s expansion is also reshaping which companies need infrastructure and how they compete. Amazon retained the largest share of worldwide cloud infrastructure revenue at 26%, followed by Microsoft at 19%, and Google at 16%, Synergy reported.

“AI has totally transformed the cloud market in terms of service capabilities, customer demand, and growth opportunities,” Dinsdale said.

Microsoft and Google grew faster than Amazon, while Oracle and neocloud providers, including CoreWeave, Crusoe, and Nebius, were among the fastest-growing companies outside the top three. Synergy said neocloud expansion is eroding the market shares of some established providers.

For data center operators, that changing mix raises questions about tenant durability and contract stability, particularly if some fast-growing providers consolidate. Dinsdale said he expects the underlying infrastructure to retain value even if an individual neocloud’s prospects change.

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Construction Demand Persists Despite Power and Tenant Risks

CBRE’s August report on North American data center trends found 7,481 MW under construction across eight primary markets in the first half of 2026, up 24.8% from a year earlier. More than 80% was preleased, up from 74.3% a year earlier. Power constraints continued to extend completion schedules, leaving customers competing for capacity that has yet to be delivered.

Those commitments mean operators evaluating expansion must weigh construction schedules and tenant stability alongside cloud revenue growth.

Dinsdale said he expects data centers, installed equipment, and existing customer contracts to find new owners if neocloud providers consolidate or fail. That suggests consolidation would redistribute infrastructure rather than leave large amounts of it unused, though the financial outcome would vary significantly by asset.

“Whatever happens to a neocloud company and its prospects for carrying on as an independent entity, there will be valuable assets that will not go to waste,” he said. “Valuations will vary greatly, but I don’t imagine too many stranded assets being trashed.”

Related: Cloud Region Migration: Optimize Costs, Latency, and Compliance

About the Author

Nathan Eddy covers data center trends and technologies across multiple industries. A graduate of Northwestern University’s Medill School of Journalism, he is also a documentary filmmaker specializing in architecture and urban planning. He currently lives in Berlin, Germany.

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Power & Sites · United States

California Resources and Bloom Energy eye 1GW of fuel cells across California to power data centers and other offtakers

Credited to Data Center Dynamics · datacenterdynamics.com · 2h ago

Photograph · Data Center Dynamics

Intend to couple the systems with carbon capture and storage

Independent energy firm California Resources Corporation (CRC) and Bloom Energy have partnered to evaluate the development of 1GW or more of fuel cell generation in California, with data centers among the targeted offtakers.

The companies signed a non-binding Memorandum of Understanding that will evaluate the deployment of Bloom's solid oxide fuel cells (SOFC), coupled with carbon capture systems.

Bloom is a developer of SOFC generators, dubbed the Bloom Box, which are stationary power generators that convert fuels into electricity through an electrochemical process without combustion. While they can be powered via hydrogen, at present the vast majority rely on natural gas.

The companies said they will look for offtake customers including data centers, utilities, community choice aggregators, municipalities, and other industrial users. In addition, they have said they will complete the interconnection and permitting work needed to bring projects online.

The plan covers front-of-the-meter and behind-the-meter projects in Central and Northern California. The front-of-the-meter projects would connect to utility offtake. The behind-the-meter projects, across CRC’s Central Valley footprint, would serve industrial users seeking on-site power.

Bloom would supply the fuel cells and third-party carbon capture technology. CRC’s carbon management business, Carbon TerraVault (CTV), is expected to handle CO2 transport and storage, with CRC managing the projects.

The companies said Bloom’s fuel cells produce a high-concentration CO2 exhaust stream, which they claim makes capture more efficient and cost-effective. The partners said that up to three million metric tons per annum of CO2 could potentially be captured and stored.

“California needs more clean, firm, reliable, and affordable power generated here at home. We are uniquely positioned with land, vast subsurface storage, and CO2 transportation and storage expertise,” said Francisco Leon, CRC’s president and CEO. “When combined with Bloom’s non-combustion technology with highly efficient carbon capture, we are positioned to deliver clean and affordable energy to power data centers and the grid at scale.”

Aman Joshi, Bloom’s chief commercial officer, added: “Our non-combustion technology makes carbon capture more efficient and economically viable at scale, opening a new path to carbon-neutral power generation and addressing the decarbonization needs of large critical infrastructure.”

Bloom has signed a range of deals across the data center spectrum over recent years.

Earlier this year, it expanded an agreement with cloud firm Oracle to supply it with up to 2.8GW of capacity. The companies inked a deal last year for an initial 1.2GW of capacity. However, deployments of the technology at Oracle’s Jupiter data center in Doña Ana County, New Mexico, have faced roadblocks due to opposition to the extension of a gas pipeline expected to feed the facility's fuel cells.

Bloom has also signed deals with Equinix for deployments across 19 data centers with a capacity exceeding 100MW, as well as an agreement with US utility American Electric Power for up to 1GW of SOFCs to power AI data centers off-grid. In October, AEP signed a 20-year Power Purchase Agreement with Google, which committed to offtake 702MW of power from a fuel cell generation project near Cheyenne, Wyoming, which utilizes Bloom’s fuel cells.