"The AI-driven datacenter construction frenzy shows no signs of slowing, but neither do concerns that the whole edifice could collapse under the weight of its own hype and mounting investment demands. Moody's 2026 Outlook report on the global datacenter market, seen by The Register, forecasts business as usual, with demand for server farm capacity continuing to rise in support of AI, cloud computing, and internet services."
"The financial services biz estimates at least $3 trillion in investment is required to keep pace with the projected level of capacity expansion between now and the end of the decade. This covers the cost of buildings, the IT infrastructure, and the power required to keep the lights on. However, the report flags worries over power grid constraints and construction bottlenecks, warning that demonstrating actual revenue generation will become "increasingly important in the AI ecosystem" to silence growing chatter about an "AI bubble.""
"Question marks over sustainability are hardly new. McKinsey & Company warned in May 2025 that huge sums are being invested in AI on demand forecasts amounting to little more than educated guesswork. MIT researchers claimed 95 percent of enterprise organizations had seen no return from their AI efforts so far, and Moody's itself says circular deals involving companies like OpenAI and Microsoft are spooking investors."
Demand for server farm capacity is forecast to keep rising to support AI, cloud computing, and internet services. At least $3 trillion of investment is required through the decade for buildings, IT infrastructure, and power. Power grid constraints and construction bottlenecks are emerging risks for new development. Demonstrating actual revenue generation is expected to become increasingly important to counter growing chatter about an AI bubble. Major consultancies and researchers warn that many AI investments are based on uncertain demand forecasts and that most enterprises report little return so far. Hyperscaler capital spending has surged and global investment is projected to peak in 2029 before declining in 2030.
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