Oct 23 (Reuters) - Digital Realty Trust ( DLR ) raised

its annual forecasts for core funds from operations and revenue

on Thursday, as it expects an increase in demand for data center

services due to the boom in artificial intelligence.

Digital Realty ( DLR ) has been benefiting from a surge in demand as

more enterprises upgrade and outsource their IT infrastructure,

further boosted by advancements in AI technology.

Large-scale cloud service providers called hyperscalers are

racing to build AI infrastructure, with Amazon ( AMZN ), Meta

, Alphabet and Microsoft ( MSFT ) projected to

spend over $360 billion in 2025, according to company filings.

Most of the investment is expected to go toward powering

data centers.

The growing demand for data centers is expected to

accelerate Digital Realty's ( DLR ) leasing activity, thereby aiding

revenue growth.

Digital Realty ( DLR ) leases out managed data centers to clients in

sectors that range from cloud and information technology to

social networking, communications and manufacturing.

The company earlier in October announced a strategic

collaboration with Dell Technologies ( DELL ) and DXC to

bring AI directly to customers' data through a combination of

validated use cases and expert-led implementation and end-to-end

management.

Austin, Texas-based Digital Realty ( DLR ) now expects annual core

FFO to be in the range of $7.32 to $7.38 per share, compared

with its prior outlook of between $7.15 to $7.25.

The real estate investment trust now expects revenue between

$6.03 billion and $6.08 billion for the year, compared with its

prior forecast of between $5.93 billion and $6.03 billion.

For the third quarter ended September 30, Digital Realty ( DLR )

posted revenue of $1.58 billion, above estimates of $1.53

billion.

Core FFO came in at $1.89 per share in the quarter, compared

with $1.67 last year.