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Investing.com -- Japanese telecom giant NTT’s data-center division plans to invest about $3 billion to expand its facilities during the current fiscal year that began in April, as demand for artificial-intelligence computing surges.
Doug Adams, chief executive of NTT Global Data Centers, said the investment reflects unprecedented growth in the industry.
"I’ve been doing this for 25 years. I’ve never seen a time in our industry where growth is as strong as it is," Adams said in an interview. "Supply is dwarfed by demand."
The company, which designs, builds and operates large-scale data centers in major cities worldwide, is one of the biggest global data-center providers. It competes with California-based Equinix (NASDAQ:EQIX) and Texas-based Digital Realty (NYSE:DLR).
This expansion follows NTT’s May announcement of plans to take full control of its IT services subsidiary, NTT Data (TYO:9613), in a deal worth approximately $16 billion. The move aims to strengthen growth areas like data centers by utilizing the telecom group’s financial resources.
NTT Data also established a real-estate investment trust in Singapore and sold data centers in the U.S., Austria and Singapore to the REIT for $1.5 billion. The REIT began trading on Monday. Adams indicated the listing was intended to raise funds for further data center investments.
While data centers require substantial capital investment, they provide operators with stable returns through long-term client contracts, according to Adams.
The company invested about $2.9 billion in data center development during the fiscal year ended March and $2.7 billion in the previous fiscal year.
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