How Increasing Global Demand And Competition Are Driving The Edge Revolution

Mark Mahle is CEO of NetActuate.

The global race is on to build enough edge data centers to keep up with sky-high demand. The worldwide edge data center market is projected to reach $317 billion by 2026, a 107% surge since its $153 billion valuation in 2020, but this number doesn’t tell the whole story.

Edge computing and AI are revolutionizing entire industries—from manufacturing and transportation to healthcare and retail—and these developments will likely result in trillions of dollars of true economic impact. U.S. business leaders can’t sit back and wait for the next chapter to unfold. Profound changes, driven by an increased need for computing power, advanced hardware, strategic investments and partnerships, are redrawing the global tech map and making it clear that we need to act now to remain competitive.

Four Key Factors Propelling The Edge Revolution

1. Demand For Infrastructure And Hardware Is Increasing

AI’s exponential growth is only amplifying our need for robust edge infrastructure to support it. Even as AI models become more efficient, there is still unrelenting demand for AI that is better and faster. If a new model promises to perform 10 times more efficiently than the leading model, it won’t be long until we want it to run 100 times faster. We’re missing the forest for the trees if we think efficiency gains will slow our need for greater computing power.

The new era of AI also requires substantial hardware resources. In 2024, Deloitte research estimated that total AI chip sales that year would account for 11% of the $576 billion global market: “Growing from roughly $US50 billion today, the AI chip market is forecasted to reach up to US$400 billion by 2027, though a more conservative estimate is US$110 billion.”

Nvidia is leading the AI chip market, but the industry is in an ongoing arms race for accelerated hardware performance. Nvidia originally designed its chips to enhance computer graphics, not power AI models, and startups are now creating chips specifically optimized for AI workloads.

2. Nuclear Power Is Making A Comeback

The power demands of AI are enormous and continue to rise. Due to increasing generative AI usage, “electricity consumption by data centers is forecasted to double to 4% of global electricity consumption by 2030,” according to a recent Deloitte study.

The tech industry, including giants such as Microsoft, Amazon, Google and Meta, is rethinking its approach to meet these growing energy requirements by investing in nuclear technology. Three Mile Island, a nuclear power plant that closed in 2019, is reopening after Microsoft signed a 20-year power purchase agreement with Constellation. Nuclear energy must play a critical—and urgent—role in supporting future AI and edge developments. Based on reports from Goldman Sachs Research, “85-90 gigawatts (GW) of new nuclear capacity would be needed to meet all of the data center power demand growth expected by 2030 (relative to 2023). But well less than 10% will be available globally by 2030.”

3. China Is Setting The Pace For Growth

China is executing an ambitious long-term strategy to be the world leader in AI by 2030. AI has the potential to add $600 billion annually to China’s economy. The Chinese government has invested heavily in a multipronged approach to AI and edge infrastructure innovation. China’s focus on AI ecosystem innovation, research and development and supply chain ownership extends all the way to the technology’s basic components, including mining and refining in-demand minerals necessary for building semiconductors.

The U.S. tech sector is watching China with justifiable concern: The country’s immense domestic AI footprint is having a global impact. In January, Chinese AI startup DeepSeek released an AI model similar to ChatGPT called R1 and caused U.S. tech stocks to plummet. Nvidia’s stock price dropped 17% in a day before starting to recover the following day.

4. The U.S. Is Balancing Domestic Investment And Global Collaboration

For tech companies in the U.S. and other countries in Europe and emerging markets, this is a pivotal moment. As business leaders, we have the opportunity to respond to China’s growth with both competitive investments and open-market collaboration.

Mutually beneficial global partnerships with allies, such as EU countries and India, will allow us to align our interests, share knowledge, innovate and drive business outcomes. We need to stay competitive by building more self-sufficient, resilient supply chains and finding the right balance of technological innovation and regulation. This shift will require substantial collective investments in next-generation hardware, software, training and infrastructure. AI is reshaping every sector, and we are only beginning to realize its true economic value. The decisions we make now will enable our collective ability to flourish on a global scale.

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