AI is big business, and so is development of the digital infrastructure needed to power it. Goldman Sachs estimates that the AI buildout will require $7.6 trillion of capex between 2026 and 2031 across compute, data centers, and power. Data centers alone will require $2.15 trillion of that spend. There’s uncertainty, though, about whether data center developers will be able to handle the surge in demand for these facilities used to train and operate AI models. Where’s the risk? There’s no shortage of challenges awaiting a data center project. Experts cited power generation, materials backlogs, and growing community opposition as some of the big ones. To say the stakes are high in building out data center networks is putting it too lightly for experts like Mike Mathews, global digital infrastructure practice leader at Marsh, who told CFO Brew, “AI isn’t a new technology as much as it is a new utility,” like electricity. The digital infrastructure serves more than AI, he added. Everything from tap-to-pay technology to military drones relies on networks of data centers and fiber-optic lines. Power “is the bottleneck in sort of getting these projects online,” according to Olivia Wang, research analyst at market intelligence firm Sightline Climate. Wang told us back in March that her firm observed median wait times of about five years to get sites powered, with that queue stretching as long as seven years for high-demand areas like the state of Virginia. Developers may also find themselves waiting a long time—as long as two years—for certain electrical equipment like transformers, she said. Read more about the data center risks developers are grappling with.—AZ |