"However, that's only one part of the problem. Meeting the power demands of AI data centers will require the energy sector to make large investments. Then there's data center demand for microprocessors, rare earth elements, and other valuable metals such as copper, which could, in a bust, make data centers the most expensively-assembled unwanted assets in history."
"Financial stability consequences of an AI-related asset price fall could arise through multiple channels. If forecasted debt-financed AI infrastructure growth materializes, the potential financial stability consequences of such an event are likely to grow,"
"For companies who depend on the continued demand for massive computational capacity to train and run inference on AI models, an algorithmic breakthrough or other event which challenges that paradigm could cause a significant re-evaluation of asset prices,"
AI data center expansion will substantially increase demand for electricity, requiring major investments from the energy sector to meet power needs. Construction and operation of data centers will boost demand for microprocessors, rare earth elements, copper, and other valuable metals, increasing exposure to commodity and supply-chain risks. Heavy debt-financed growth in AI infrastructure would amplify potential financial stability consequences if asset prices fall. Companies that rely on sustained large-scale computational capacity face significant risk of asset revaluation should algorithmic breakthroughs or other paradigm shifts reduce the need for massive compute resources.
Read at Computerworld
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