In some places in the form of shopping malls and football grounds, the power-taresi data centers, the power-thiresti data center have become a staple of the suburb. However, when Microsoft draws plugs Last month, at the data centers employed in Ohio, it added questions about whether the newborn data center boom had already been bust. A Wales Fargo Report last Monday Some data centers employed by Amazon web services are being added to the market concern, being reconsidered.
But it may be bust before it has ever started. And if anything, a “stagnation” on some data center projects comes within a spending environment that remains strong.
“We continue to look at the quick scaling of the deployment of AI in the data center market,” said Giyordano Albertazi, CEO of Ohio -based data center supplier, strong demand signs have strengthened both our close and long -term development. ” Vertical Last week on an earning call. Its shared week ended up to 22%.
Both Amazon and Nvidia Re -confirmed last week The data center market remains strong.
“No significant changes have been done really,” Kevin Miller said at a conference organized by Amazon’s Global Data Center, Name Institute for American Energy. “We continue to see very strong demand, and we are looking long -term with both over the next few years and only going up the numbers.”
This does not mean how, where and when to spend how, where and when not changing because the AI market develops and successes need to be digested. This year at an interval of six weeks, China’s deep incident exploded, the $ 500 billion AI-managed Stargate initiative of President Trump was announced, and concerns over concerns over tariffs and trade wars.
“Everyone has created a scenario, where the data center industry is taking a little break,” said Pat Lynch, Executive Managing Director of the Commercial Real Estate Company CBRE’s data center solutions. “I think it’s a temporary break,” Lynch said, given that the project pipeline and its funnel remain important and continue to execute CBRE deals. “I carefully optimistic about the future demand, especially when you think of a big AI training model,” Lynch said.
Microsoft invested $ 1 billion at data centers in Ohio in the same area, where Intel has planned chip factories, but the timeline has slowed down.
A Microsoft spokesman said in a statement to CNBC, “After carefully considering, we will not proceed with our plans to create data centers on chaat county sites at this time. We will continue to evaluate these sites to suit our investment strategy.”
A UBS report of the previous week concluded that amidst all possible explanations to cancel the data center, it was most likely that Microsoft had overcome the AI Rush, and was now getting zero on projects that are currently the most understanding. Noted that the Capex on the lease of Microsoft was 6.7x above in a two -year period, with a lease of $ 175 billion. The UBS wrote, “Microsoft bought the ability of the leased data center available in 2022-2024 and now some of them are visible to abolish the early stage projects.” Its report states, “We get the lowest support for ‘demand lul’ explanation.”
Anat Ashkanaji, Alphabet CFO, Cloud Supplies describes the environment as “tight” Its latest earnings On Thursday. “We can see variability in cloud revenue growth rate based on capacity deployment in each quarter,” he said. “We expect a relatively high capacity deployment at the end of 2025.”
A global real estate investment manager with $ 83 billion in property under management, including an important data center portfolio, BGO co-CEO John Carfil said, “We are not seeing a return from demand, but not seeing a strategic repetition.” The most important players, they say, are not pulling back with Microsoft, Google, Meta, and Amazon, this year Capex plans to spend more than $ 300 billion, which is associated with AI infrastructure this year. And, they say, it does not include other prominent players, such as both Openai and Oracle Joined in Stargate Project,
“Instead of a stir, it is a reshuffle of deck in an environment, where the power, with water and land -are power, rare and strategic,” said Carfel. Long -term enterprise adoption will boost AI demand and data center demand for the next decade. “We are not yet in the first innings,” he said.
Power data centers have lifebloggedBut there are no data centers plug-and-play operations that require abundant electricity to keep computing power and fans cool. As the initial use of generic AI adoption to the enterprise-scale application, the end-users will intensify the requirement of high-deficit data centers, but this will take time for the correct set of conditions with the expected data center square footage.
“New data centers are so dramatically growing in size that the grid cannot keep the new data center size,” said Elon Shur, Chief Commercial Officer of Microgrid Developer Mugdleer Muggled Rock. Three years ago, a large data center was 60 MW – enough power to supply 20,000 homes, but now he says that the new data centers are requested to be 500 MW or more to support all uses of Artificial Intelligence.
This rapid growth in electricity use is at the top of new demand from electrification of manufacturing and transport, which are simultaneously weighing on supply and infrastructure. Data centers give a unique challenge to utilities, which must ensure that they can supply electricity to all customers, even the time of demand for summit. “This is why some utilities are referring to the long -term interconnection time for data centers,” Shur said. He said, “Utilities need to invest in new substations and they may also need to expand transmission and generation, all of which take time,” he said.
CBRE has seen data centers from incorporating 2% portfolio of its portfolio in 2022 in 2022, and Lynch hopes to keep growing, and the closeness of electricity is running the current market, as the data center builders are looking for areas with a lot of access to the power. Georgia, Texas, and Ohio all boxes are very examined by builders, and if an area does not have a grid or infrastructure capacity, it needs to be rapidly capable.
Lynch said, “The availability of large power within 36 months is attractive to the customers.”
According to dataceners.com, three percent of the world’s power is now tied to data centers.
Shur said that the data of enchanted rock indicates that there is a lot of power available to meet the demand – most of the time. Out of 8,760 hours of the year, the grid is only under stress for a fraction of them. “If we can reduce the demand on the grid for 100 to 500 hours, the delay in long interconnections can be shortened,” he said.
According to Pankaj Sachdeva, senior partner of McInsey & Co., there is a significant difference between some recent stagnation implemented by a comprehensive technology companies, which research the development of the data center and expects an eb and flow.
Recently based on McKinse modeling, which does not include tariff effects, the data center market is expected to increase in 20% -25% range over the next five to seven years, but the year -system growth rate will vary. “It won’t be linear,” he said.
Tariff changes will introduce new cost pressures in the supply chains of AI and data centers, especially with significant mineral tariffs on the horizon.
“These disruptions will increase hardware costs, affect sourcing strategies, and will require businesses to rethink their long -term purchase models,” said John Archer said, “these disruptions will increase hardware costs,” senior delivery principal and supply chain transformation leader in Slalom Consulting. In the short term, AI and cloud providers will need to apply cost-mood strategies such as re-organizing suppliers contracts and optimizing inventory.
“Long-term, a push towards geographical diversification, co-formation in tariff-unseen areas, and deep integration of AI-operated supply chain analytics may be expected to be favorable to develop business policies,” said Archer.
A factor that has not changed is that the calculation power is currently expensive, and it requires a lot of need for AI software and hardware, the CEO of the poet technologies, a publicly trading company, which develops power solutions for data centers, according to the CEO. He said, “The explosion in AI challenges the data centers to find a more efficient solution because AI requires such quantity of power that it is contrary to anything we saw,” he said. “While a data center project can hit a wall, others are likely to be spring, because there is no sign of recession in demand for connectivity,” he said.
