Datacenter Tailwinds

Group think or golden moment?

𝗜𝘀 𝘁𝗵𝗶𝘀 𝗮 𝗰𝗮𝘀𝗲 𝗼𝗳 𝗴𝗿𝗼𝘂𝗽 𝘁𝗵𝗶𝗻𝗸, 𝗼𝗿 𝗮𝗿𝗲 𝘄𝗲 𝗿𝗲𝗮𝗹𝗹𝘆 𝗶𝗻 𝗮 𝗴𝗼𝗹𝗱𝗲𝗻 𝗺𝗼𝗺𝗲𝗻𝘁 𝘄𝗵𝗲𝗿𝗲 𝗮𝗹𝗹 𝗻𝗲𝘄𝘀 𝗶𝘀 𝗴𝗼𝗼𝗱 𝗻𝗲𝘄𝘀 𝗳𝗼𝗿 𝗱𝗮𝘁𝗮 𝗰𝗲𝗻𝘁𝗲𝗿𝘀 𝗮𝗻𝗱 𝗽𝗼𝘄𝗲𝗿 𝗱𝗲𝗺𝗮𝗻𝗱?

𝙒𝙝𝙮 𝙞𝙩 𝙢𝙖𝙩𝙩𝙚𝙧𝙨? Seeing sentiment only get more positive following the “Deepseek scare” is a testament to the strength and ultimate potential, but also a risk, to the AI trend.

The trend was already strong and showing up in the numbers. Dominion Energy’s Robert Blue shared that they now have “approximately 40 gigawatts [of data center capacity] in various stages of contracting as of December 2024, which compares to around 21 gigawatts as of July 2024, an increase of 19 gigawatts or 88%.” See the slide below.

Discussing the DeepSeek announcement, Microsoft’s Satya Nadella stated that as AI becomes more efficient and accessible, "AI will be much more ubiquitous, and so therefore, for a hyperscaler like us, a PC platform provider like us, this is all good news as far as I’m concerned" That sentiment was echoed through many earnings calls.

Duke Energy’s Harry Sideris noted that “efficiencies may actually increase the demand for AI” when asked about the thread DeepSeek represented for power demand. American Electric Power’s Bill Fehrman commented “it continues to be full speed ahead.”

And Equinix’s Adaire Fox-Martin added “DeepSeek, I think will enable the economics of AI transformations to become a little bit more feasible for a broader set of organizations. And so that's why we feel that this will represent a secular demand driver for our business.”

𝗜𝘀 𝘁𝗵𝗶𝘀 𝗮 𝗰𝗮𝘀𝗲 𝗼𝗳 𝗴𝗿𝗼𝘂𝗽 𝘁𝗵𝗶𝗻𝗸, 𝗼𝗿 𝗮𝗿𝗲 𝘄𝗲 𝗿𝗲𝗮𝗹𝗹𝘆 𝗶𝗻 𝗮 𝗴𝗼𝗹𝗱𝗲𝗻 𝗺𝗼𝗺𝗲𝗻𝘁 𝘄𝗵𝗲𝗿𝗲 𝗮𝗹𝗹 𝗻𝗲𝘄𝘀 𝗶𝘀 𝗴𝗼𝗼𝗱 𝗻𝗲𝘄𝘀?