How do we power AI?
AI consumes enormous volumes of energy. This demand will only increase as AI continues to integrate seamlessly with our day-to-day lives. So should investors maybe get exposure to the broad AI datacenter ecosystem that powers this demand, still?
In recent months, some analysts suggested that datacenter demand was waning. Expectations were too high. We’d gotten ahead of ourselves? Not so much.
Here’s CNBC from last week:
Data center demand is not slowing down in the world’s largest market centered in northern Virginia, executives at Dominion Energy said Thursday. Dominion provides electricity in Loudoun County, nicknamed “Data Center Alley” because it hosts the largest cluster of data centers in the world. The utility works closely with the Big Tech companies that are investing tens of billions of dollars in data centers as they train artificial intelligence models.
“We have not observed any evidence of slowing demand from data center customers across our service area,” Dominion’s ($D (+1,26%) ) chief financial officer, Steven Ridge, told analysts on the company’s first-quarter earnings call… Data center customers have not paused spending on new projects in Dominion’s service area and they have not shown any concerns about economic uncertainty, Dominion CEO Robert Blue said.
And here’s research shop Bespoke last week on X:
Data center investment added a full percentage point to GDP in Q1; a record.
Next up, there’s Jonathan Gray, CEO of private equity giant Blackstone ($BX (-1,44%) ). Yesterday, he said that he sees huge demand coming for AI datacenters.
From Gray:
I think this trend is powerful. I think it will continue…
Overall, we still see a ton of demand.
And let’s not forget Microsoft’s earnings announcement last week.
Microsoft has continued its heavy investments in AI infrastructure this quarter. During the earnings call, [Microsoft CEO] Nadella said that the company opened data centers in 10 countries on four continents.
And earlier this year, the CEO said that $MSFT (-0,97%) plans to spend $80 billion in fiscal 2025 on construction of data centers designated for AI workloads
AI isn’t going away…which means datacenter demand isn’t going away. Invest accordingly.
Happ Investing
GG
Driving AI:
$NVDA (-2,63%)
$AMD (-5,15%)
$INTC (-10,36%)
$TSM (-3,38%)
$D (+1,26%)
$ASML (-4,98%)
