Digital Realty CEO Defends $20 Billion Pipeline as AI Slowdown Fears Hit Data Center REITs
Updated
Updated · CNBC · Sep 15
Digital Realty CEO Defends $20 Billion Pipeline as AI Slowdown Fears Hit Data Center REITs
3 articles · Updated · CNBC · Sep 15
Summary
Digital Realty CEO Andrew Power said calls to slow AI development do not mean a halt for data center real estate, arguing demand remains supported by cloud, storage, enterprise IT and internet services.
70% of global data center capacity demand could come from AI by 2030, McKinsey said, but Power and JLL argue the bigger near-term driver is inference adoption rather than training ever-new models.
Digital Realty and Equinix shares fell Monday after weekend warnings on AI, even as Power said key markets including Northern Virginia, Dallas, Singapore and Frankfurt still face demand outpacing supply.
$20 billion of Digital Realty projects are under construction, up from $10 billion at the end of 2023, with Power saying the REIT has raised private capital, used joint ventures and kept leverage low.
$3 trillion could flow into data center real estate over the next five years, JLL estimates, underscoring why Blackstone, BlackRock and KKR still show strong conviction in the sector.