Digital Realty CEO: AI Slowdown Won't Derail REIT Boom — SkimNews
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- Digital Realty CEO Andrew Power called AI slowdown pledges from Anthropic, OpenAI, and xAI not a "pencils down" moment for data center real estate, arguing that non-AI cloud computing demand has been "stifled" in the current AI focus and could rebound.
- Digital Realty and Equinix stocks slumped Monday following weekend warnings over AI advancements, with Power telling shareholders not to let "daily gyrations" affect company strategy.
- McKinsey projects AI will account for roughly 70% of global data center capacity demand by 2030, with total capital outlay of nearly $7 trillion, of which JLL estimates $3 trillion will be real estate investment over the next five years.
- JLL's Andrew Batson said the real growth driver is inference—business and citizen adoption of AI tools—not model training, noting only 1 in 4 Americans use AI daily and leaving "significant runway" regardless of new model release pace.
- Digital Realty's development pipeline now totals $20 billion under construction, doubled from $10 billion at the end of 2023, with Power citing low leverage and high liquidity as preparation for "any potential storm."
- Blackstone, BlackRock, and KKR maintain "high conviction" in data centers according to Batson, keeping institutional capital flowing into the sector despite AI-volatility headlines.
Why it matters: Data center REITs face a $7 trillion capital cycle through 2030, and Power's distinction between AI training and inference demand gives institutional investors a defensible thesis against AI-bubble panic. The doubled $20 billion construction pipeline and continued commitment from Blackstone, BlackRock, and KKR suggest the sector's fundamentals remain insulated from any pause in frontier model development.
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