"He said he was concerned about landlords who were building data centers based on speculation about future demand. "I am also deeply concerned about the 'speculative' data center market," Davis wrote in his letter. "The 'build it and they will come' strategy is a trap. If you are a hyperscaler, you will own your own data centers." He said he predicted a "significant financing crisis in 2027-2028 for speculative landlords.""
"In a similar letter on LinkedIn, Davis also talked about data centers, and said AI has spurred "too many business models with no realistic margin expansion." "This will not end well," he added on LinkedIn. Disruptive Tech has backed Groq, an AI hardware startup. In a press release in September in which it announced a $750 million capital raise, Groq said Disruptive Tech had invested nearly $350 million in the company."
An investor warned that rapid data center construction in the US is speculative and could stress the system. Landlords are building on assumed future demand while hyperscalers typically own their own facilities. The investor predicted a significant financing crisis for speculative landlords in 2027–2028. He said AI has spawned too many business models without realistic margin expansion and warned that this dynamic will not end well. Disruptive Tech has made large investments in AI companies including Groq, which raised $750 million and later signed a $20 billion licensing deal with Nvidia. US data center counts nearly quadrupled from 2010 to 2024.
Read at Business Insider
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