Digital Realty CEO Downplays AI Slowdown Impact on Data Center Real Estate
Recent warnings about slowing artificial intelligence (AI) development have caused declines in data center real estate investment trust (REIT) stocks, including Digital Realty and Equinix. However, Digital Realty's CEO Andrew Power argues that the slowdown does not signal a halt to AI or related infrastructure demand. Power emphasized ongoing digital transformation trends beyond AI, such as cloud computing growth, which continue to drive data center needs globally. He noted that hyperscalers are balancing commercial cloud expansion with AI lab investments and highlighted regional disparities in market impact due to locational constraints on workloads. Andrew Batson of JLL added that the real near-term demand for data centers lies in inference—AI adoption by businesses and individuals—which is still growing rapidly. He pointed out that only a quarter of Americans use AI daily, suggesting significant room for expansion even with slower model development.
Topics: AI Data Centers REITs Stock Market Reaction