Digital Realty CEO: AI Slowdown No Disaster for Data Centers
Digital Realty's CEO downplays fears that an AI slowdown would devastate data center real estate amid stock declines for major REITs.
Shares of Digital Realty and Equinix, two of the largest data center real estate investment trusts, declined following broader market concerns tied to warnings about the pace of artificial intelligence advancement. The sell-off reflected investor anxiety over whether slowing AI growth could undercut demand for the massive computing infrastructure both companies operate.
Digital Realty's chief executive pushed back against the bearish sentiment, characterizing a potential AI slowdown as far from catastrophic for the sector. The CEO's remarks signaled confidence that data center demand rests on a foundation broader than any single technology wave, and that the underlying need for digital infrastructure remains intact regardless of near-term fluctuations in AI investment cycles.
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The comments come at a sensitive moment for data center REITs, which have been among the more prominent beneficiaries of the AI boom. Any signal that hyperscale customers could pull back on capacity expansion has outsized implications for companies whose business models depend on long-term leasing of server space and power infrastructure.
Analysts have noted that while AI-driven buildout has accelerated growth projections for the sector, legacy demand from cloud computing, enterprise IT, and internet traffic provides a durable revenue base. That diversification is central to the argument that data center operators can weather an AI-specific correction without suffering permanent damage to their growth trajectories.
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