Edge Data Center Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Component (Solution, Service), By Facility Size (Small & Medium, Large), By End-use (IT and Telecom, BFSI, Healthcare and Lifesciences, Manufacturing & Automotive, Government, Gaming and Entertainment, Retail and E-commerce, Others), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 15.46 Billion
CAGR (2026-2031)	15.63%
Fastest Growing Segment	IT and Telecom
Largest Market	North America
Market Size (2031)	USD 36.95 Billion

Market Overview

The Global Edge Data Center Market will grow from USD 15.46 Billion in 2025 to USD 36.95 Billion by 2031 at a 15.63% CAGR. Edge data centers are decentralized computing facilities positioned near data generation sources to minimize latency and bandwidth usage by processing information closer to the end-user. The primary driver of this market is the exponential proliferation of Internet of Things (IoT) devices and the critical requirement for real-time processing in applications such as autonomous vehicles and smart cities. This demand for high-performance localized compute is reshaping infrastructure strategies; according to AFCOM, in 2025, 79% of data center professionals expected rack densities to increase further, driven largely by the implementation of artificial intelligence workloads.

However, a significant challenge impeding the rapid expansion of the market is the complexity of managing power and cooling in these distributed environments. Edge facilities often operate in remote or space-constrained locations where installing adequate cooling systems for high-density racks is technically difficult and capital-intensive. Consequently, ensuring consistent energy efficiency and physical security across a fragmented network of unmanned sites remains a formidable obstacle for operators aiming to scale their edge footprint.

Key Market Drivers

The rising integration of Artificial Intelligence (AI) and Machine Learning (ML) workloads at the edge is fundamentally altering infrastructure requirements, as organizations seek to process data at its source for real-time inference. By deploying high-performance compute nodes closer to end-users, enterprises can reduce the latency and bandwidth costs associated with transmitting massive datasets to centralized clouds. This operational shift is creating a critical demand for densified edge facilities capable of supporting power-intensive algorithmic models. This urgency to modernize infrastructure is evident; according to Cisco, November 2024, in the '2024 AI Readiness Index', 98% of organizations reported increased pressure to deploy AI, with businesses expecting AI-related spending to comprise 30% of IT budgets within five years.

Simultaneously, the accelerating commercialization of 5G networks and low-latency connectivity is acting as a primary enabler for these distributed computing architectures. The widespread rollout of 5G provides the high-speed, reliable transport layer necessary for next-generation applications like autonomous logistics and smart grids, which rely on edge data centers for immediate data processing. This connectivity expansion is substantial; according to Ericsson, June 2024, in the 'Ericsson Mobility Report', global 5G subscriptions reached 1.7 billion in the first quarter of 2024, driving the need for localized infrastructure to handle surging mobile traffic. Reflecting this broader momentum, according to the Automotive Edge Computing Consortium and GSMA Intelligence, February 2024, in the 'Report Shows Investment in Edge Computing Infrastructure to Grow in 2024', 73% of surveyed companies across five industries expressed their intent to increase edge investments over the next 12 months.

Download Free Sample Report

Key Market Challenges

The complexity of managing power and cooling in distributed, space-constrained environments constitutes a severe impediment to the Global Edge Data Center Market. Unlike centralized hyperscale facilities that leverage economies of scale, edge sites are frequently located in remote or retrofitted structures where installing high-capacity cooling infrastructure is logistically challenging and capital-intensive. This technical limitation directly hampers the ability of operators to deploy high-density compute nodes necessary for advanced workloads, as the physical infrastructure cannot reliably dissipate the heat generated without risking equipment failure.

Consequently, this inability to ensure thermal stability and energy efficiency across a fragmented network creates a prohibitive operational expense that stifles market scalability. The industry's struggle with this efficiency barrier is evident in recent performance metrics. According to the Uptime Institute, in 2024, the global average Power Usage Effectiveness (PUE) ratio stagnated at 1.56, underscoring the persistent difficulty in optimizing power overheads despite technological innovations. This stagnation indicates that as operators expand to the edge, the lack of cooling efficiency translates into unsustainable energy costs, effectively slowing the deployment of new edge facilities.

Key Market Trends

The Widespread Deployment of AI-Ready Edge Infrastructure is transforming the market as operators build decentralized regional hubs specifically designed for high-density workloads. This structural evolution moves beyond simple content caching, focusing instead on robust facilities capable of handling heavy inference tasks for generative AI and autonomous systems locally. This pivot addresses the operational inefficiency of processing real-time data streams in centralized clouds, forcing a redistribution of capital toward localized assets. Reflecting this significant momentum, according to JLL, August 2024, in the 'Global Edge Data Center Market to Hit $300 Billion by 2026' report, 21% of all data center development in the United States is currently taking place in edge geographies, highlighting the tangible migration of infrastructure investment toward these distributed environments.

Simultaneously, the Adoption of Micro-Modular and Prefabricated Data Centers has become the primary method for executing this rapid expansion. Operators are utilizing factory-assembled modules that integrate power, cooling, and IT infrastructure into pre-tested units, effectively circumventing the logistical delays and inconsistencies associated with traditional construction in remote areas. This industrial standardization allows for scalable "plug-and-play" deployment that aligns infrastructure delivery times with immediate capacity demands. Underscoring this shift in construction methodology, according to Schneider Electric, November 2024, in the 'Schneider Electric Increases Production Capacity at its Largest Data Centre Factory in Europe' press release, the company expanded its prefabricated modular data center manufacturing facility in Barcelona from 7,000 square meters to 12,000 square meters to address the surging customer demand for these high-compute solutions.

Segmental Insights

The IT and Telecom sector represents the fastest-growing segment within the global edge data center market, driven primarily by the global rollout of 5G infrastructure. Telecommunication operators are increasingly adopting decentralized architecture to minimize latency and efficiently manage high data volumes from mobile networks. This shift allows providers to process information closer to the source, which is essential for maintaining network reliability and supporting bandwidth-intensive applications. Consequently, the industry focus on mobile edge computing ensures that the IT and Telecom vertical remains a primary catalyst for market expansion.

Regional Insights

North America maintains the leading position in the global edge data center market due to the early and extensive deployment of 5G infrastructure and the presence of major hyperscale cloud providers. The region benefits from substantial capital investment in telecommunications, supported by spectrum allocation initiatives from regulatory entities such as the Federal Communications Commission to enhance network density. Additionally, the widespread adoption of the internet of things and the critical need for low-latency processing in autonomous vehicle development further fuel market expansion. These structural advantages ensure the continued dominance of North America in this sector.

Recent Developments

• In August 2025, EdgeConneX announced the acquisition of a second data center site in the Greater Osaka area of Japan, significantly expanding its presence in the Asia-Pacific region. This new development was designed to add 150 megawatts of capacity, bringing the company’s total potential capacity in the Kansai region to 350 megawatts. The expansion aimed to address the surging demand for cloud and artificial intelligence infrastructure in a power-constrained market. This strategic move reinforced the company's commitment to delivering scalable and sustainable digital infrastructure solutions closer to end-users in key global economic hubs.
• In August 2025, Lumen Technologies launched an enhancement to its network capabilities, offering high-speed connectivity of up to 400 gigabits per second to more than 70 third-party data centers across the United States. This service expansion targeted 16 major metro markets, including Dallas, Ashburn, and Los Angeles, to support the growing bandwidth requirements of artificial intelligence and machine learning workloads. The initiative allowed enterprise customers to provision flexible, on-demand bandwidth, facilitating faster data transfer and improved latency at the network edge, which is critical for real-time applications and multi-cloud environments.
• In July 2024, American Tower unveiled a new data center concept known as Aggregation Edge Data Centers, with the first facility launching in Raleigh, North Carolina. This innovative infrastructure model was designed to extend cloud services closer to the network edge, prioritizing a low-latency environment for enterprises and local businesses. The facility, located at the base of an existing communications tower, leveraged the company's extensive real estate portfolio to create a distributed network of edge assets. The launch highlighted the company's strategy to support the increasing processing needs of artificial intelligence and Internet of Things applications by decentralizing compute resources.
• In July 2024, AtlasEdge announced the development of its second data center in Barcelona, Spain, to support the rapidly growing digital economy in Southern Europe. The pan-European edge data center provider acquired a plot of land for a facility expected to deliver an initial 10 megawatts of power, with the potential to scale to 24 megawatts. This expansion was driven by significant customer demand for connectivity and colocation services in the region, which serves as a critical gateway for subsea cables linking Europe, Africa, and the Middle East. The project underscored the company's focus on building highly connected, sustainable infrastructure in key tier-one and tier-two markets.

Key Market Players

• 365 Data Centers
• Amazon Web Services, Inc.
• American Tower Corporation
• AtlasEdge Data Centres
• Cisco Systems, Inc.
• DartPoints, Inc.
• Dell Technologies Inc.
• Digital Realty Trust, Inc.
• EdgeConneX Inc.
• Equinix, Inc.

By Component	By Facility Size	By End-use	By Region
Solution Service	Small & Medium Large	IT and Telecom BFSI Healthcare and Lifesciences Manufacturing & Automotive Government Gaming and Entertainment Retail and E-commerce Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Edge Data Center Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Edge Data Center Market, By Component:

• Solution
• Service

• Edge Data Center Market, By Facility Size:

• Small & Medium
• Large

• Edge Data Center Market, By End-use:

• IT and Telecom
• BFSI
• Healthcare and Lifesciences
• Manufacturing & Automotive
• Government
• Gaming and Entertainment
• Retail and E-commerce
• Others

• Edge Data Center Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE