Bubble Risk as Investors Flock to AI Data Centers

Major investment firms such as KKR, BlackRock and Blue Owl have poured hundreds of billions of dollars into the sector, raising concerns about the risk of an asset bubble.

Wall Street is seeing a surge in investment in data centers, fueled by the explosion of Artificial Intelligence (AI).

Major investment firms such as KKR, BlackRock and Blue Owl have poured hundreds of billions of dollars into the sector, raising concerns about the risk of an asset bubble.

Investment in data centers has increased sharply in recent times due to the need for AI development. This is evidenced by OpenAI's recent announcement of plans to build a giant computing complex in the United Arab Emirates (UAE).

Similarly, investor Chamath Palihapitiya also said he bought real estate in Arizona and planned to raise $25 billion to build a data center there.

Not everyone is optimistic about the outlook, however. TD Cowen analyst Michael Elias warns of the risk of oversupply, noting that several major tech companies, including Microsoft and Foxconn, have already canceled some data center leases.

Sharing the same view, Mr. Joe Tsai - Chairman of Alibaba, who considers AI as the core of business operations, expressed concern about signs of a bubble in the data center construction industry.

Despite these concerns, major investors such as Blackstone have maintained strong demand for data centers, saying that technology companies are willing to sign long-term leases of 15 to 20 years. Blackstone has also reaffirmed its commitment to building more data centers and investing in the power plants that power them.

The complexity and operating costs of AI-focused data centers are enormous. They consume huge amounts of electricity, which can be 10-20 times higher than conventional cloud computing.

In addition, these centers must also maintain continuous, uninterrupted operation, requiring complex infrastructure and cooling systems./.

(Vietnam News Agency/Vietnam+)

Source: https://www.vietnamplus.vn/nguy-co-bong-bong-khi-gioi-dau-tu-do-xo-vao-cac-trung-tam-du-lieu-ai-post1042188.vnp