Key Takeaways
- Investment in Asia’s data centres is forecast to double to US$200 billion by 2030, largely due to the rise of artificial intelligence.
- This growth in AI will significantly boost demand for digital infrastructure and, consequently, electricity.
- Regional power markets are expected to tighten much sooner than previously thought.
- Natural gas, alongside renewable energy sources, will play a key role in powering this expansion.
- Morgan Stanley identifies promising opportunities for companies in the power supply chain.
Asia is set for a massive surge in data centre investment, potentially reaching US$200 billion by 2030, as the increasing use of artificial intelligence (AI) fuels demand for digital infrastructure and electricity. This insight comes from analysts at Morgan Stanley.
In a recent report, the bank highlighted that this boom in capital spending is likely to strain regional power markets far quicker than anticipated. Power consumption across Asia is already outpacing even optimistic forecasts, driven by broader AI adoption, the reshoring of supply chains, and growth in advanced manufacturing.
Consequently, Morgan Stanley has increased its power-demand growth forecast for the region through 2030. Key markets like China, Japan, Malaysia, and Thailand are seeing particularly sharp growth. Data centres in these countries alone are projected to consume 100 gigawatts of electricity by 2030, making up a significant portion of Asia’s new power needs.
Globally, data centres accounted for about 1.5 per cent of the world’s electricity consumption in 2024, with usage growing steadily since 2017. As AI applications become more widespread, this upward trend is expected to continue, putting more pressure on power infrastructure.
The Morgan Stanley analysts emphasized that natural gas will be crucial for powering AI, working in conjunction with renewable energy sources. They suggest that the market hasn’t fully recognized the companies set to benefit from the urgent need for reliable power.
Grid operators and natural gas-fired plants are well-positioned because they can provide a dependable supply of electricity on shorter notice. The report also identified other beneficiaries, such as gas pipeline suppliers, given rising US gas exports and regional energy demands.
Infrastructure firms specializing in clean-energy integration, grid modernization, advanced cooling systems, and battery storage are also expected to become increasingly important. Notably, 2024 has seen equipment manufacturers regaining pricing power, a trend Morgan Stanley anticipates will extend to generators, transmission operators, and midstream providers.
Reflecting these trends, the bank’s analysts have highlighted several companies across Asia that are poised to benefit. These include firms in integrated energy, grid operation, power generation, and equipment manufacturing, suggesting a broad impact across the energy and infrastructure sectors.
