"If you look historically in areas like this over the past 20 or 30 years, typically when this much capacity comes online, some of it at the end of the day has to be marginal,"
"These trends tend to lead to overbuilds in certain places, so us being selective and measured in what we build is important."
Major alternative asset managers are committing large sums to data center projects to capture rising demand for AI processing power. Firms view data centers as a more reliable way to gain AI exposure than buying AI equities because winners are hard to predict. Ares is targeting more than $8 billion of equity fundraising for data centers across London, Japan and Brazil and raised $2.4 billion in the first half of the year for facilities. Ares also increased its wealth fundraising target by $25 billion to $125 billion by 2028 and acquired GLP Capital Partners’ operations outside China, doubling its real estate assets and enabling more direct data center development. Increased capacity raises the risk of marginal assets and localized overbuilds, prompting calls for selectivity and measured development.
Read at Fortune
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