Digital Realty CEO says AI slowdown won’t halt data center demand

When major AI labs start hedging their expansion plans, data center landlords get nervous calls from investors. Digital Realty CEO Andrew Power spent part of September 15 on CNBC explaining why those calls are missing the bigger picture.

Power’s core argument: a slowdown in AI development timelines at firms like Anthropic and OpenAI does not translate to fewer servers needing a home. The demand for data center real estate, he said, has consistently exceeded supply across major markets for years, and that gap is not closing anytime soon.

The pipeline tells its own story

Digital Realty currently operates roughly 3 GW of data center capacity across 300 facilities in 55 metropolitan areas worldwide. The company’s development pipeline has grown to $20 billion, up from $10 billion at the end of 2023. It also has an additional 6 GW development runway beyond its current operating capacity.

Those forecasts carry some weight. Projections suggest AI could drive roughly 70% of global data center capacity demand by 2030, with an estimated $3 trillion in real estate investment anticipated over the following five years.

Emerging markets and new facilities

Digital Realty recently opened a 6.4 MW facility in Nairobi, Kenya, and formed a joint venture to build a 22 MW data center in Ankara, Turkey. It also secured a provisional 50 MW allocation for a planned site in Singapore.

Singapore has been restrictive about new data center approvals in recent years due to energy concerns, making any approved capacity genuinely scarce.

What the stock reaction actually means

Shares of Digital Realty, ticker DLR, and competitor Equinix both slipped following signals from major AI developers about a more measured pace of advancement.

Power’s counterargument is that cloud adoption, enterprise software, streaming, financial services, and healthcare data workloads all require physical infrastructure, with or without a ChatGPT upgrade cycle.

Investors who piled into data center REITs on the strength of AI euphoria are sensitive to any signal that the AI buildout might pause. For long-term holders, the more relevant number is probably that $20 billion pipeline, not the short-term price movement.

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