Observed Signal · Sep 15, 2026 · Policy Update · Source: CNBC Technology · Impact: 3/5 · Sentiment: Positive
AI slowdown not 'end of world' for data centers: Digital Realty CEO
Digital Realty CEO Andrew Power asserts that an AI development slowdown, pledged by major AI players Anthropic, OpenAI, and xAI, is not catastrophic for data center real estate. He argues that broader digital transformation and cloud computing growth remain strong demand drivers. The article notes that AI could account for 70% of global data center capacity demand by 2030, requiring nearly $7 trillion in capital outlay according to McKinsey. While stocks of data center REITs like Digital Realty and Equinix slumped, Power emphasizes that the company's funding model and $20 billion development pipeline position it well. JLL's Andrew Batson highlights that future data center growth lies in inference (adoption of AI tools), not just training new models, with only 1 in 4 Americans using AI daily.
Insights from a major data center REIT CEO on the resilience of infrastructure demand amid AI slowdown rhetoric, relevant to the intersection of AI, cloud, and real estate for AdTech/MarTech infrastructure.
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Key Takeaways & Evidence Grounding
- Digital Realty CEO Andrew Power says AI slowdown pledges by Anthropic, OpenAI, and xAI are not 'pencils down' for AI or data center real estate.
- McKinsey report projects AI could account for about 70% of global data center capacity demand by 2030.
- McKinsey estimates nearly $7 trillion in capital outlay needed to meet total data center demand by 2030.
- Digital Realty's development pipeline totals $20 billion under construction, up from $10 billion at end of 2023.
- JLL's Andrew Batson states that only 1 in 4 Americans use AI daily, indicating significant growth runway for inference-driven demand.
Connected Companies & Entities
7 Entities mapped“Digital Realty CEO Andrew Power, however, said the pledges for a slowdown by major AI players Anthropic, OpenAI and xAI do not mean 'pencils...”
“Digital Realty CEO Andrew Power, however, said the pledges for a slowdown by major AI players Anthropic, OpenAI and xAI do not mean 'pencils...”
“Digital Realty and Equinix, two of the largest data center REITs, saw their stocks slump on Monday following the weekend warnings over AI ad...”
“Batson pointed to institutional money from Blackstone, BlackRock and KKR, which he said 'have high conviction in this space.'”
“Batson pointed to institutional money from Blackstone, BlackRock and KKR, which he said 'have high conviction in this space.'”
“Batson pointed to institutional money from Blackstone, BlackRock and KKR, which he said 'have high conviction in this space.'”
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Related Market Signals & Shifts
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Wall Street weighs AI slowdown impact on data center buildout
The article discusses Wall Street's concerns about a potential slowdown in AI model development and its impact on the data center buildout. Key companies like Oracle, GE Vernova, Caterpillar, Vertiv, and CoreWeave are heavily invested in AI infrastructure. A proposal by Anthropic CEO Dario Amodei to slow the pace of frontier model development led to a sell-off in AI infrastructure stocks. The article also mentions that companies are rushing to secure AI debt, with Amazon raising about $6 billion and Alphabet raising about $10 billion. Investors are worried that any significant delay in AI development could negatively affect these companies.
HSBC CEO Warns AI Boom Won't Make Every Data Center a Good Bet
HSBC CEO Georges Elhedery told CNBC that while artificial intelligence is a transformational technology, investors must be selective when funding data centers. He emphasized the importance of evaluating the quality of tenancy agreements and contract pricing, noting that not all data center deals are equally sound. The comments come amid a surge in global data center spending, projected to reach $7 trillion by 2030, according to McKinsey. Big Tech companies are increasingly turning to debt and private credit to finance these facilities, leading to concerns about rising debt levels and bond market pressure. Mohamed El-Erian of Allianz highlighted that hyperscalers raised $200 billion in bond financing last year and may raise up to $1 trillion this year, adding to competition for capital. JPMorgan estimates $4.1 trillion in AI-related debt will be issued by the end of the decade, raising concerns about financial stability.
AI Data Center Boom 'Stress‑Tests' Insurers and Lenders
Rapid private-capital financing and large-scale deals for AI data centers are creating capacity and risk strains for insurers and lenders. McKinsey estimates global data-center spending could reach $7 trillion by 2030, and Preqin data show private infrastructure data-center deals were consistently above $10 billion last year, including a $40 billion consortium purchase of Aligned Data Centers involving Nvidia, Microsoft, BlackRock and xAI. Insurers say concentrating tens of billions in single campuses has created capacity and underwriting challenges, while new financing structures—such as GPU-backed loans—raise lifecycle and opacity risks. CoreWeave announced an $8.5 billion investment-grade GPU-backed deal. Industry participants (insurers, brokers, law firms, and senators) have raised concerns about off‑balance-sheet financing, concentration risk, and potential second‑order litigation for downstream investors.
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