Venture capitalist Alex Davis is "deeply concerned" that too many data centers are being built without guaranteed tenants, according to a letter being sent this morning to his investors.
Why it matters: This critique is coming from inside the AI optimist camp.
- Davis' firm, Disruptive, recently led a large investment in AI chipmaker Groq, which then signed a $20 billion licensing deal with Nvidia.
- It's also backed such unicorn startups as Reflection AI, Shield AI, Databricks, and Gecko Robotics.
What he's saying: "The 'build it and they will come' strategy is a trap. If you are a hyperscaler, you will own your own data centers. We foresee a significant financing crisis in 2027–2028 for speculative landlords."
- He adds that data center buildouts will put too much "stress on the system."
The bottom line: Data centers are becoming political flashpoints, primarily because of their impact on electricity prices.
- Now, the investment community is also asking questions.
Read the full letter:
