Digital Realty CEO: AI Slowdown Would Not Doom Data Center REITs
Digital Realty's CEO downplayed fears that an AI slowdown would devastate data center real estate, even as major REIT stocks fell on AI concerns.
The chief executive of Digital Realty, one of the largest data center real estate investment trusts in the United States, sought to reassure investors this week, saying that a potential slowdown in artificial intelligence demand would not spell catastrophe for the sector.
Shares of Digital Realty and rival Equinix, both among the biggest data center REITs trading on U.S. markets, declined following broader market warnings tied to shifts in the AI landscape. The sell-off reflected investor anxiety over whether surging demand for AI infrastructure could plateau sooner than anticipated.
Read more Digital Realty CEO: AI Slowdown No Disaster for Data Centers →
Despite the stock pressure, Digital Realty's CEO characterized the situation as far from an existential threat, stopping short of describing any AI-driven cooling as the "end of the world" for companies that own and operate large-scale data facilities. The comments signal that data center operators believe their long-term fundamentals remain intact even if near-term AI enthusiasm moderates.
The remarks carry weight given how closely data center REITs have been tied to the AI investment boom. Demand for computing power to train and run AI models has driven significant leasing activity and expansion plans across the industry in recent years, making any signal of deceleration particularly sensitive for shareholders.
Analysts will likely watch upcoming earnings guidance from both Digital Realty and Equinix closely for more concrete indicators of whether enterprise and hyperscale customers are pulling back on data center commitments or simply recalibrating timelines. Continue reading at Business News
