"We're in the midst of a meteoric rise of data centers promising power, server space, and economic opportunity across America. But the data center boom is already at risk of becoming a bust unless we start building, and investing in, AI applications that go beyond chat bots or agents to solve real problems in daily life like security, affordability, healthcare, and household waste."
"While recent investments from tech giants like Amazon and Nvidia suggest a capital expenditure (CapEx) bubble remains far off, the possibility floods headlines. True insulation requires meaningfully redistributing investment from CapEx to creating the apps and services required to achieve sustainable ROI on billion- and trillion-dollar infrastructure bets. It involves launching a new phase of the AI era that Goldman Sachs prices at $8 trillion."
"It's clear from back-of-the-napkin math that we need to continue investing capital to construct physical infrastructure that supports the AI race. America's private sector must play a leading role in helping community and national grids handle massive levels of electricity and compute. Large companies like Amazon, Nvidia, and Google and VC-backed startups, like Crusoe and OpenAI, are actively working on it. However, there's a massive opportunity here to build out the application layer that scales AI into the physical world and ensures data center investment is worth every penny."
Data center construction is surging across America, promising power, server capacity, and economic opportunity but risking a bust without AI applications that solve practical problems. Investment must shift from CapEx toward developing AI apps and services addressing security, affordability, healthcare, and household waste to secure sustainable ROI on massive infrastructure bets. National electricity demand is projected to grow by 128 gigawatts over five years while planned data centers will add 93 GW, requiring continued capital investment and private-sector leadership to upgrade community and national grids. Major companies and startups are building infrastructure, and there is a significant opportunity to scale AI into the physical world via an application layer.
Read at Fortune
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