”1. AI is the elephant in the stock room 2. Data centers are AI Ground Zero 3. AI is still a magnet for funding 4. Political appetite is growing for AI regulation 5. Real-world uses have yet to emerge at scale. (..) While betting on eventual AI applications may be a shot in the dark, investors continue to pile into the picks and shovels of infrastructure, starting with Nvidia’s cutting-edge chips. Most of those will end up in data centers. The cloud is a misnomer, suggesting an ethereal miasma that is everywhere and nowhere. In fact, data centers are very physical. By some measures, there are over 10,000 worldwide, half of which are in the US. Each has thousands of servers running millions of virtual machines. Blackstone and the Canadian Pension Plan Investment Board’s agreement to buy Sydney-based AirTrunk last week puts an enterprise value of over AUD 24bn on the largest data center platform in the Asia Pacific region. There will likely be about $2 trillion of capital expenditure to build and facilitate new data centers over the next five years – of which half will be in the US, Blackstone said.”
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