Excerpt from Vertiv Must-Read Research Blog
Some fundamental truths cut through.
“It’s the economy, stupid”, did so for presidential hopeful Bill Clinton in the early 1990s. The phrase, and the strategy behind it, allegedly helped the Democratic candidate become US president. Focusing on the economy, while painting opponent George H.W. Bush as out of touch, sealed the deal with US voters.
The upshot? Prioritizing economics is always a sensible strategy. Unless perhaps that is you happen to be a hyperscale data center operator in the mid-2020s. Some might argue that short term economics have been deprioritized in the current AI arms-race.
Billions are being spent on new capacity by large operators, and LLM owners, who believe that almost no price is too high to pay right now to achieve future AI supremacy. According to the Financial Times, spending on data centers will jump from $333bn in 2024 to about $1trn in 2030. More than 80 percent of that investment will go into AI-related infrastructure.
But that level of AI investment is not representative of the totality of data center owners and operators. For the vast majority, made up of smaller enterprise owned facilities, shorter term economics and cost control is still a key consideration.
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EARTHED-TECH 