Digital Realty CEO: AI Slowdown Won't Sink 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.
Digital Realty's chief executive sought to calm investor nerves this week, saying a potential slowdown in artificial intelligence growth would not spell disaster for the data center real estate sector, despite recent turbulence hitting shares of the industry's biggest players.
Digital Realty and Equinix, two of the largest data center real estate investment trusts in the United States, saw their stock prices fall following broader market concerns tied to warnings about the pace of AI advancement. The selloff reflected anxiety that a cooling in AI infrastructure demand could undercut the aggressive expansion strategies both companies have pursued.
Read more Stock Futures Slip Before Fed Meeting as Yields and Oil Rise →
The Digital Realty CEO's remarks represent a pushback against that narrative, framing any potential deceleration in AI spending as a manageable headwind rather than an existential threat to the sector. Data center REITs have benefited significantly from the surge in cloud computing and AI workloads, with hyperscale clients committing to long-term leases that provide revenue stability even through market volatility.
Analysts have noted that while sentiment around AI can shift quickly, the underlying demand for physical computing infrastructure — driven by enterprise digitization, cloud migration, and AI model training — remains structurally intact. A slowdown in the pace of AI development would likely delay, rather than eliminate, the capacity build-out that has fueled record leasing activity across major data center markets.
Continue reading at Business News.
