AI / Data Center Bubble
Are we in an AI / data center bubble? All these data center deals are reminiscent of the life science bubble from '21-'22.
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Yes. There is real and significant demand for data centers. The "real" demand for data centers does lead to hockey-stick type growth. However, the current.... market expectations far exceed what the actual underlying reality warrants
Here's my (uneducated) take on data centers. A lot of demand for data centers now and wouldn't shock me if there was a lot of demand in the future. I would be worried about obsolescence. Once your initial lease term is up, will you be able to re-lease or will you be holding a vacant bag in the middle of nowhere at a billion dollar basis?
We are in a time period bubble. The difference between this and the fiber bubble that blew up in the 90s is that in the future the overbuilt data centers might be worth $0 if the structural needs in 5 - 10 years from now is very different than what is in demand today.
The real question is, are we overbuilt? No. Not even close.
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