Expansion and sedimentation data centers have become a suburbs stimmer in some places such as shopping centers and football fields. However, when Microsoft withdrew the planned data centers in OHIO last month, the questions about whether the dough of the data center had already been removed. A Wells Fargo report last Monday by saying that some data centers planned by Amazon Web Services were being reconsidered to market anxiety.
But the bust can have a leg before. And in any case, a “pause” in some data centers projects is within an expense environment that remains strong.
“We will continually see the accelerated scale of AI implementations throughout the data centers market, with strong demand signals that reinforce both our growth and in the long term,” said Giordano Albertazzi, CEO or provider of data centers based in Ohio VERTIV in a earning call last week. His shared ended the week with 22%.
Amazon and Nvidia reaffirmed last week that the data centers market is still strong.
“There is really no significant change,” said Kevin Miller, vice president of Amazon Global Data Centers, at a conference organized by the Hamm Institute for American Energy. “We continually see a very strong demand, and we are looking for both in the next two years and in the long term and seeing that the numbers only rise.”
That does not mean that strategic thinking about how, where and when to spend exactly does not change as the market evolves and advances should be digested. In the period of six weeks this year, the deep Speek of China broke into the scene, the Stargate initiative of $ 500 billion of $ 500 billion AI was announced, and the concerns about tariffs and commercial beer markets were announced.
“All that has created a scenario in which the data centers industry is a pause, in general,” said Pat Lynch, executive managing director of the data centers of the Commercial Real Estate Company CBRE. “I think it is a temporary roast,” Lynch added, noting that the project pipe and its funnel are still significant and CBRE continues to execute agreements. “I’m still a demand for optilical compensation, swallowing when you think of great AI training models,” Lynch said.
Microsoft had promised an investment of $ 1 billion in OHIO headquarters in the same area where Intel has planned chips factories, but the timeline has slowed.
“After a careful consideration, we will not advance with our plans to build data centers at Licking County sites at this time. We will continue to evaluate the online thesis sites with our investment strategy,” said a Microsoft in A in A A A A A A A A A A Declaration to CNBC.
An UBS report last week concluded that among all possible explanations for the cancellations of the data centers, it was very likely that Microsoft had surpassed in the middle of the AI Rush, and now it was concentrating on the projects that currently make more sense. He pointed out that the Microsoft leased capex rose 6.7 times within two years, with lease obligations of approximately $ 175 billion. “Microsoft bought as much data center available as it could in 2022-2024 and now has the visibility of eliminating some of these ‘projects in the initial stage,” UBS wrote. “We found the least support for the explanation of ‘Lull of demand’,” added his report.
Anat Ashkenazi, Alphabet CFO described the cloud supply demand environment as “tight” after its last profits on Thursday. “We could see the variability in the growth rates of income in the cloud depending on the implementation of the capacity each quarter,” he said. “We expect a relatively high capacity deployment towards the end of 2025.”
“We are not seeing a removal of demand, but a real strategic ration,” said John Carrafiell, Co-Coo or BGO, a world manager of real estate investments with $ 83 billion in assets under administration, including an important portfolio of data centers. The most important players, he says, are not going back, with Microsoft, Google and Amazon plan to spend more than $ 300 billion in Capex this year-Larga linked to AI infrastructure. And, he says, he does not include other important players, such as Operai and Oracle, both involved in the Stargate project.
“Instead of a bust, this is a reorganization of the roof in an environment where power in particular, together with fiber, water and earth, are scarce and strategic,” said Carrafielll. The long -term business adoption will boost the demand for the demand for AI and the data center for the next decade. “We are still in the first post,” he said.
Power is the soul of data centers, but data centers are not operations plug and play, which require large amounts of electricity for computer energy and fans to maintain fresh infrastructure. As the generative adoption of AI passes from early experimentation to the business scale application, the need for high -efficiency high efficiency data data to be intense will be intense, but it will take time that the correct set of conditions will take time.
“The new data centers increase in size so dramatically that the network cannot be kept up to date,” said Allan Schur, commercial director of the Micorred Enchathed Rock developer. Three years ago, a large data center was 60 megawatts, sufficient power to supply 20,000 houses, but now it says that the new data centers support all the uses of artificial intelligence are requesting 500 megawatts or more.
This rapid growth in the use of electricity is in addition to the new demand for the manufacture and electrification of transport, which are together in supply and infrastructure. Data centers raise a unique challenge for public services, which must guarantee that it can provide energy to all customers, only in times of demand. “That is why some profits cite long interconnection waiting times for dates centers,” said Schur. “Public services must invest in new substations and may also need to expand transmission and generation, all of which has been,” he added.
CBRE has seen that the data centers go from the understanding of 2% of their portfolio in 2022 to 10% in 2024, and Lynch hopes that this will continue to grow, and the proximity of energy is promoting the current market, as energy areas of the data center. Georgia, Texas and Ohio verify many of the boxes that the builders are looking for, and if an area is not, it is not no, it cannot be done not infrastructure, it must be able to climb quickly.
“Having great energy availability within 36 months is attractive to customers,” Lynch said.
Three percent of the world’s power is now linked to data centers, according to datacenters.com.
Schur said that Uneced Rock data indicates that there is a lot of energy available to meet demand, most of the time. Of the 8,760 hours a year, the grid is only under stress due to a fraction of them. “If we can relieve the demand of the network for those 100 to 500 hours, long interconnection delays can be shortened,” he said.
An important distinction can be made between the idea of a broader deceleration and some of the recent pauses promulgated by the main technology partners, according to the senior partner of McKinsey & Company, Pankaj Sachdeva, who investigate and wait. Development of the Data Center.
“It won’t be linear,” he said.
Based on McKinsey’s recent modeling, which does not include the impact of rates, the data centers market is expected to grow in the range of 20% –25% in the next five to seven years, but year after year there will be variations in the growth rate.
Rate changes will introduce new cost pressures into the AI and Data Center supply chains, partly with critical mineral tariffs on the horizon.
“These interruptions will raise hardware costs, impact supply strategies and require companies to rethink their long -term acquisition models,” said John Archer, director of senior delivery and transformation of the supply chain in Slalom Consulting. In the short term, IA and Cloud suppliers will need to implement cost mitigation strategies, such as renegotiating supplier contracts and inventory optimization.
“In the longer term, it can be expected that an impulse towards geographical diversity, manufacturing in regions suitable for rates and the deepest integration of the supply chain analysis promoted by AI adapt to evolving commercial policies,” Archer said.
One factor that has not changed is that Compute Power is currently demanding, and much more is necessary for the software and Hardware of AI, according to Sureesh Venkatesan, CEO of Poet Technologies, a public quoted company for data cenotters. “The explosion in AI challenges data centers to find more efficient solutions because it requires a calculation power in that volume that is different from everything we have witnessed,” he said. “While a data center project can hit a wall, it is likely that others arise, because there are no indications of a deceleration in connectivity demand,” he added.