The State of AI Data Centers: A Troubling Future
Artificial intelligence is rapidly transforming industries, but the economics of AI data centers poses a serious risk to our economy. A recent analysis by Harris Kupperman, CIO of Praetorian Capital, sheds light on the shaky foundations of this burgeoning sector.
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Skyrocketing Costs: The fiscal outlook for Texas data center projects surged from $130 million to $1 billion in just two years.
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Disturbing Projections: Kupperman estimates 2025 data centers will face $40 billion in depreciation but only generate $15-$20 billion in revenue.
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Investment Concerns: Current spending trends indicate a potential revenue shortfall that could lead to significant financial strain.
Kupperman emphasizes the need for realistic assessments amidst the optimism around AI. The future may hold incredible promise, but without a sustainable business model, we risk hitting a wall.
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