Every so often, the human race comes down with building fever. Investors’ temperatures soar, lavish projections of future demand go viral and spending swells. Once the fever breaks, there comes a long and painful convalescence.
Railways, early automobiles, telecoms networks, shale oil wells and Chinese apartments have all been through the cycle. Now it is the turn of data centres that host AI services. Can the multitrillion-dollar investment in these air-conditioned electronic warehouses — perhaps the biggest peacetime investment project in history — buck the historical trend of booms ending in busts? Some powerful people believe so, at least for them.
Among them are Meta Platforms boss Mark Zuckerberg, and his counterparts at Google parent Alphabet, Microsoft, Amazon and Oracle. The five are forecast to deploy $4tn of capital expenditure over five years, according to analyst estimates gathered by Visible Alpha, most of it on data centres they hope will reshape their businesses.