DLR - What Increasing Power Demand Could Mean For Data Center REITs

2024-06-05 09:22:31 ET

Summary

• Artificial intelligence is driving an increase in electricity demand, with data centers sitting front and center.
• Global data center power demand could more than double by 2030, largely due to the introduction and adoption of generative AI.
• Utility companies must prepare for a tidal wave of new demand from power-hungry data centers, which are the primary source of sales growth for many companies.
• Equinix and Digital Realty Trust are two data center REITs who could encounter issues with upgrading legacy assets to support modern requirements.

Artificial intelligence continues to drive demand for electricity and those poised to deliver are positioned to capitalize on a once-in-a-lifetime gold rush. In addition to increased demand, AI is instigating a deceleration in gains of energy efficiency causing forward projections around electricity usage to deviate from historical trends. Data centers are one of the most highly impacted segments of this increased demand....

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