On Wednesday, Deepwater Asset Management's managing partner Gene Munster said the $40 billion Texas-based data center project backed by Nvidia Corp. (NASDAQ:NVDA), Elon Musk's xAI, Microsoft Corp. (NASDAQ:MSFT) and BlackRock Inc. (NYSE:BLK) underscores the massive long-term potential of artificial intelligence.
Gene Munster: ‘We're Still Early In AI'
Munster took to X, formerly Twitter, writing, "The latest data point that we're still early in AI: Nvidia, xAI, Microsoft, and BlackRock are purchasing a $40B Texas-based data center."
"This underscores the conviction that the most forward-thinking companies have in AI's long-term potential."
He added that he looks forward to hearing "the 2026 capex guidance from the hyperscalers on October 29 and 30."
BlackRock, Microsoft And Nvidia Involved in $40 Billion Acquisition
On Wednesday, it was announced that an investor consortium featuring BlackRock, Microsoft and Nvidia is acquiring Aligned Data Centers, reported Reuters.
This is one of the world's largest data center operators with nearly 80 facilities, in a $40 billion deal aimed at securing critical computing capacity for AI.
The U.S.-based data center operator is being purchased from Australian firm Macquarie Asset Management, marking the first deal for the AI Infrastructure Partnership, which also counts Abu Dhabi's MGX fund and xAI among its backers.
Analysts Say AI Growth Driven By Data Centers, Not Financing
Munster's comments align with the remarks from Bank of America Securities analyst Vivek Arya, who said investor fears about vendor financing in the U.S. semiconductor industry are overstated.
Arya argued that the real AI growth driver lies in data center expansion and power availability, not speculative financing.
He estimates AI-related capital expenditures could reach $1.2 trillion annually by 2030, adding that vendor-backed deals like Nvidia's $100 billion partnership with OpenAI make up only a fraction of total AI spending.
Economists Warn Of A Growing Economic Divide
However, investor Steve Eisman — known for predicting the 2008 financial crisis — issued a cautionary note, saying the U.S. economy is becoming increasingly dependent on AI capital spending.
Economist Justin Wolfers echoed the concern, warning that "the non-AI parts" of the economy are flatlining, while Moody's Analytics chief economist Mark Zandi said 22 states are already seeing economic contraction.
Benzinga's Edge Stock Rankings give Nvidia a Growth score of 97.87% and a Momentum rating of 83.45%. See how it stacks up against other top tech firms.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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