Data Center Developments will Soar as the Backbone of AI Infrastructure.
The integration of AI is still in its early stages and will require immense resources and infrastructure, especially during this phase.
Data centers have been the unsung heroes supporting the growth of technology and digital services over the last two decades.
With AI technologies emerging, these centers will play a more critical role than ever before.
A Brief Dive into History
CenterSquare, one of the pioneers in real estate investment, saw the potential of data centers 20 years ago. They believed that the blend of technology and real estate was the future.
Their faith was well-placed as today, data center REITs (Real Estate Investment Trusts) have surpassed even retail and office sectors in market share.
How AI Plays a Part
The integration of AI is still in its early stages. Yet, even now, it’s evident that existing data center REITs will be instrumental in its expansion.
AI, especially in its developmental phase, requires immense resources and infrastructure – something that only established, well-funded platforms can provide.
The Two Stages of AI Deployment
Understanding AI in data centers involves grasping its two phases:
Training: This is where AI systems, like language models, are “taught” and refined. It demands significant power and resources. Companies like Amazon and Intel are setting up in places with cheap power and a business-friendly atmosphere.
Inferencing: After training, the AI models are put to work. This phase emphasizes quick connectivity and low latency. It’s expected that, in the future, AI hubs will be situated near major data centers to ensure speedy and efficient access.
The Edge of Innovation
While there’s a lot of buzz around edge computing and decentralized models, big data centers are still very much in demand.
For the REITs, the primary focus remains on the main data centers while also keeping a presence in the edge markets.
Why Cloud On-Ramps Matter
REITs currently dominate the hyperscale cloud on-ramps, which will be pivotal for AI’s inferencing phase.
These neutral cloud environments will let users connect with multiple AI models at once, reducing costs and improving speed.
Looking Ahead
Predicting the exact trajectory of AI’s integration with data centers has its challenges due to factors like regulations, hardware advancements, and capital investment dynamics.
However, one thing is sure: as AI grows, so will its reliance on robust data center infrastructure.
In a nutshell, as AI technologies expand and become more integrated into our lives, data centers will be at the heart of this evolution, ensuring that these advanced systems have the resources and connectivity they need to function at their best.
