The global investment spree in artificial intelligence is producing some remarkable numbers and a projected $3tn (£2.3tn) spend on datacentres is one of them.
These vast warehouses are the central nervous system of AI tools such as OpenAI’s ChatGPT and Google’s Veo 3, underpinning the training and operation of a technology into which investors have poured vast sums of money.
Despite concerns that the AI boom could be a bubble waiting to burst, there are few signs of it at the moment. The Silicon Valley AI chipmaker Nvidia last week became the world’s first $5tn company and Microsoft and Apple’s valuations hit $4tn, the latter for the first time. A restructuring at OpenAI has valued the company at $500bn and a stake owned by Microsoft at more than $100bn. This could lead to a $1tn flotation as early as next year.
On top of that, Google’s owner Alphabet has reported revenues of $100bn in a single quarter for the first time, helped by growing demand for its AI infrastructure, while Apple and Amazon have also just reported strong results.
It is not just the financial world, politicians and tech companies who have faith in AI: it is also the communities hosting the infrastructure behind it.
In the 19th century, demand for coal and steel from the Industrial Revolution shaped the destiny of Newport. Now the Welsh city is hoping for a new chapter of growth from the latest transformation of the global economy.
On the outskirts of Newport, on the site of a former radiator factory, Microsoft is building a datacentre that will help meet what the tech industry hopes will be exponential demand for AI.
Standing on a concrete floor that will soon host thousands of humming servers, the Labour leader of Newport city council, Dimitri Batrouni, says the Imperial Park datacentre is a chance to tap into the economy of the future.
“With cities like mine, what do you do? Do you worry about the past and try to bring steel back with 10,000 jobs – it’s unlikely. Or do you embrace the future?” he says.
But despite the market’s current positivity about AI, questions remain about the sustainability of the tech industry’s outlay.
Four of the biggest players in AI – Amazon, Facebook parent Meta, Google and Microsoft – have increased spending on AI. Over the next two years they are expected to spend more than $750bn on AI-related capital expenditure, meaning non-staff items such as datacentres and the chips and servers inside them.
It is a spending spree that Manning & Napier, a US investment company, describes as “nothing short of incredible”. The Newport site alone will cost hundreds of millions of dollars. Last week, the California-based Equinix said it was planning to invest £4bn on a centre in Hertfordshire.
In March, the chair of the Chinese e-commerce group Alibaba, Joe Tsai, warned he was seeing signs of excess in the datacentre…
Source link
Disclaimer
We strive to uphold the highest ethical standards in all of our reporting and coverage. We blogs.grocliq.com want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.
Website Upgradation is going on for any glitch kindly connect at [email protected]
