Global investments in data centers surged by fifty-one percent last year, reaching four hundred fifty-five billion dollars, according to a report by Dell’Oro Group. The firm anticipates a further thirty percent growth in infrastructure capital expenditures this year. The majority of the spending was directed towards expanding cloud vendor capacities, with the top ten hyperscalers accounting for over half of the global capital expenditures in 2024. Notably, companies like Amazon Web Services, Microsoft, and Google Cloud are heavily investing in infrastructure to meet the rising demand for artificial intelligence capabilities. Dell’Oro predicts that annual capital expenditures could exceed one trillion dollars by twenty twenty-nine. Additionally, enterprises increased their hardware and infrastructure spending by twenty-five percent year over year, totaling one hundred fifty billion dollars in 2024, marking the largest growth rate since the firm began tracking the market in two thousand fourteen.
The U.S. PC market is projected to see a modest growth of two percent in 2025, amid ongoing tariff concerns affecting prices for consumers and businesses. According to data from Canalys, PC shipments to the United States rose six percent year-on-year to 17.7 million units in the fourth quarter of 2024, largely driven by demand in the commercial sector. While total PC shipments are expected to range between 70 and 72 million units annually, challenges remain due to fluctuating trade policies. In particular, the survey conducted by Canalys revealed that fifty percent of U.S. channel partners held five weeks or more of PC inventory as of January 2025, compared to twenty-nine percent in November 2024. The commercial segment has been particularly strong, spurred by the approaching end-of-service date for Windows 10, prompting businesses to refresh their PC fleets. However, the tariffs have led to uncertainty in pricing and have spurred stockpiling within the industry. Notably, Apple achieved a milestone by surpassing Lenovo in the vendor rankings, with a twenty-six percent annual growth in Mac shipments during the same quarter.
Axios looked at the trend of job growth in the United States, which has become increasingly reliant on government, health care, and education sectors. According to Treasury Secretary Scott Bessent and other officials from the Trump administration, this dependency indicates a weaker economy than it appears. Over the past two years, employment in government and health care has increased by 3.2 million jobs, a 6.7% rise, while other sectors collectively added only 948,000 jobs, a mere 0.9% increase. This shift raises concerns about future labor market stability, as hiring in these sectors is expected to slow significantly, from 100,000 jobs per month now to just 15,000 in the latter half of the year, according to Goldman Sachs economists. The thesis: that the labor market’s reliance on low-productivity sectors may hinder economic growth and challenges the sustainability of this current trajectory.
Why do we care?
Most of the data center CapEx is consolidated among top ten hyperscalers, making it a high-stakes, capital-intensive game that many players simply can’t afford. The enterprise segment also saw a significant 25% YoY increase in hardware/infrastructure spending ($150B), indicating that AI workloads and data locality concerns are pushing even traditional enterprises to invest in on-prem or hybrid environments. A projected 30% YoY CapEx growth with long-term forecasts of a $1T spend carries bubble-like signals, especially if AI monetization fails to keep pace. Infrastructure buildouts don’t guarantee ROI—particularly if GenAI solutions underdeliver commercially or face regulatory friction. With over 50% of global CapEx from just ten companies, any pullback by the hyperscalers could sharply deflate market momentum. This isn’t a broad-based boom—it’s highly top-heavy.
PC shipments in the U.S. rose 6% YoY in Q4 2024, with projected 2% growth in 2025. The catalyst? Windows 10 end-of-life driving commercial refresh cycles. Apple surpassed Lenovo with 26% growth in Mac shipments. However, 50% of channel partners are now sitting on 5+ weeks of inventory—up from 29% in November 2024. This is not sustained demand—it’s a deadline-driven refresh cycle. The spike is likely frontloaded into 2024-2025, creating a potential hangover effect in 2026. The glut of inventory also suggests that vendors and resellers overestimated demand, likely due to tariff fears and supply chain uncertainty.
Private sector job growth is stagnant, meaning tech service demand from non-public sectors may underwhelm unless enterprise and SMB investments rebound. If job growth continues to skew toward sectors with traditionally lower productivity (e.g., government, education, healthcare), this could suppress GDP growth and technology investment. Especially for firms offering productivity-enhancing solutions, ROI cases may be harder to make if clients operate in budget-constrained, regulation-heavy sectors.
