Amid the “fanfare” of a $3 trillion AI datacenter spending spree, a key industry watchdog warns that many of these projects are just “part of the hype machine” and “will never be built.”
Andy Lawrence of the Uptime Institute, which inspects and rates datacenters, provides a sober counter-narrative to the “exuberance.” He states that “a lot of this is speculative” and that “many of the datacentres… will be built and populated only partially, or gradually, over a decade.”
This warning directly attacks the $3tn projection, suggesting it’s inflated with “speculative” projects. This echoes the concerns of Alibaba’s chair, Joe Tsai, who sees a “bubble” in projects “raising funds for construction without commitments from potential customers.”
This “hype machine” is being funded by a $1.5tn “private credit” boom, with lenders “eager to deploy capital into AI” without “properly assessing the risks.” They are funding “unproven” assets that may never be completed, let alone generate revenue.
This is all happening as an MIT study finds 95% of corporate AI pilots are yielding “zero return.” The Uptime Institute’s warning suggests the $3tn boom is a mix of real, “healthy” projects (like Microsoft’s in Newport) and “speculative” announcements that are little more than vaporware.