"Lee pointed out what this means: these firms are no longer content to rent or co-locate, they're buying the physical backbone of the AI revolution. The fact that four of the most dominant forces in finance and technology have joined forces signals a shared recognition that data center capacity is becoming the next oil field. Their collective bet implies that global cloud and AI compute demand is outpacing current infrastructure at an unprecedented rate."
"Lee and I both wondered who's next. Giants like Digital Realty and Equinix, longtime pillars of the data center world, could become prime takeover targets as hyperscalers race to lock in space, power, and cooling capacity. If this acquisition triggers a domino effect, we could see a reordering of the data center market into a few mega-consolidated networks - controlled by tech, financed by Wall Street, and powered by increasingly scarce electricity."
"As I noted, CNBC recently reported that utilities are struggling to track true demand. Data center developers now "shop" among power providers, creating what analysts call shadow demand. One utility might receive ten inquiries but only one actual contract, yet each must plan as if all ten will materialize. The result? Utilities risk overbuilding, companies risk overpaying, and the grid itself risks being overstressed."
BlackRock, Nvidia, Microsoft and OpenAI committed $40 billion to purchase data centers, indicating expectations of exponential expansion in cloud infrastructure. Major tech and finance firms are acquiring physical data center capacity rather than renting or co-locating, treating capacity as a strategic asset akin to oil fields. Such purchases could prompt hyperscalers to target companies like Digital Realty and Equinix, driving consolidation into a few mega-networks controlled by tech and financed by Wall Street. Utilities face "shadow demand" from developers shopping power options, risking overbuilding, higher costs, and grid overstress, which could reshape construction and energy planning.
Read at 24/7 Wall St.
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