# Government Data Center Market > Government Data Center Market: USD 21.12 billion in 2026, USD 38.36 billion by 2035, a 7.08% CAGR from 2025, as sovereign hosting and recovery rules grow. Publisher: DC Market Insights Author: Amit Jain, DC Market Insights Published: 2026-10-22 Last updated: 2026-10-22 Next review: Apr 2027 Page: https://www.dcmarketinsights.com/report/government-data-center-market ## Key takeaways - Daejeon NIRS Fire: 709 Systems Down and a One-Hour Recovery Target - Federal Consolidation Hits Diminishing Returns - Cloud First Rules Move Citizen Systems Out of Government Halls - Build-to-Suit Sovereign Halls for Relocated Systems **Frequently Asked Questions** **What is the size of the Government Data Center Market in 2026?** USD 21.12 billion in 2026, up 9.09% from USD 19.36 billion in 2025, according to DC Market Insights estimates. The market is projected to reach USD 38.36 billion by 2035, a CAGR of 7.08% from 2025. **How fast is the government data center market growing?** 7.08% a year from 2025 to 2035, after 7.39% a year from 2020 to 2025, as government IT load in use rises from 4,600 MW to 7,500 MW and the AI rack share climbs from 6% to 23%. **What happened at the South Korea government data center fire?** A battery fire at the NIRS Daejeon center on 26 September 2025 disrupted 709 government systems; all were restored by 30 December 2025, and the government plans to close Daejeon by 2030 and relocate 693 systems. **Are governments still closing data centers?** Yes, but more slowly: OMB said in 2019 that US closures had reached diminishing returns. Agency-owned sites fall from 56.0% of 2025 value to 42.0% by 2035 as Germany, Saudi Arabia and the UK pool systems into shared sites. **How do national laboratories affect government data center spending?** Public research and national laboratories grow 11.17% a year to USD 6.14 billion by 2035. Frontier's hall needed about 40 MW, and Argonne's Solstice will carry 100,000 NVIDIA Blackwell GPUs. **Which segment of the government data center market grows fastest?** HPC and AI research computing grows fastest at 14.46% a year to USD 10.87 billion by 2035; among deployment models, wholesale and build-to-suit leads at 11.73%. **Which region leads the government data center market?** North America, with USD 8.52 billion or 44.0% of 2025 value. The Middle East and Africa grows fastest at 9.92% a year, and India is the fastest large country at 14.76%. **Can Saudi government agencies build their own data centers?** No. Saudi Arabia's Cloud First Policy bars civilian government entities from buying or building new data center infrastructure; only government-owned cloud providers such as the National Information Center may build them. **Who are the main data center providers for governments?** Ark Data Centres (through Crown Hosting), Iron Mountain, Equinix, Digital Realty and QTS lead leased government capacity, holding about 27% of USD 3.04 billion in government colocation and hosting spending in 2025 (DC Market Insights estimate). **Why do government data center market estimates differ?** USD 21.12 billion in 2026 counts only owned and leased data center capacity. Estimates that add government cloud services, defence cloud contracts, IT outsourcing or electricity come out larger. ## Dataset | Series | Value | Unit | | --- | --- | --- | | Market size 2025 | 19,360 | USD million | | Revenue CAGR | 7.08 | % | | Market size 2035 | 38,360 | USD million | ## Frequently asked questions ### What is the size of the Government Data Center Market in 2026? USD 21.12 billion in 2026, up 9.09% from USD 19.36 billion in 2025, according to DC Market Insights estimates. The market is projected to reach USD 38.36 billion by 2035, a CAGR of 7.08% from 2025. ### How fast is the government data center market growing? 7.08% a year from 2025 to 2035, after 7.39% a year from 2020 to 2025, as government IT load in use rises from 4,600 MW to 7,500 MW and the AI rack share climbs from 6% to 23%. ### What happened at the South Korea government data center fire? A battery fire at the NIRS Daejeon center on 26 September 2025 disrupted 709 government systems; all were restored by 30 December 2025, and the government plans to close Daejeon by 2030 and relocate 693 systems. ### Are governments still closing data centers? Yes, but more slowly: OMB said in 2019 that US closures had reached diminishing returns. Agency-owned sites fall from 56.0% of 2025 value to 42.0% by 2035 as Germany, Saudi Arabia and the UK pool systems into shared sites. ### How do national laboratories affect government data center spending? Public research and national laboratories grow 11.17% a year to USD 6.14 billion by 2035. Frontier's hall needed about 40 MW, and Argonne's Solstice will carry 100,000 NVIDIA Blackwell GPUs. ### Which segment of the government data center market grows fastest? HPC and AI research computing grows fastest at 14.46% a year to USD 10.87 billion by 2035; among deployment models, wholesale and build-to-suit leads at 11.73%. ### Which region leads the government data center market? North America, with USD 8.52 billion or 44.0% of 2025 value. The Middle East and Africa grows fastest at 9.92% a year, and India is the fastest large country at 14.76%. ### Can Saudi government agencies build their own data centers? No. Saudi Arabia's Cloud First Policy bars civilian government entities from buying or building new data center infrastructure; only government-owned cloud providers such as the National Information Center may build them. ### Who are the main data center providers for governments? Ark Data Centres (through Crown Hosting), Iron Mountain, Equinix, Digital Realty and QTS lead leased government capacity, holding about 27% of USD 3.04 billion in government colocation and hosting spending in 2025 (DC Market Insights estimate). ### Why do government data center market estimates differ? USD 21.12 billion in 2026 counts only owned and leased data center capacity. Estimates that add government cloud services, defence cloud contracts, IT outsourcing or electricity come out larger. ## How to cite Data Center Market Research & Consulting | DC Market Insights, "Government Data Center Market", updated 2026-10-22, https://www.dcmarketinsights.com/report/government-data-center-market