Digital Realty says AI to drive next wave of datacenter demand

The datacenter industry "may now be on the precipice of the next wave of demand" driven by artificial intelligence, machine learning and other new technologies that will run for the next decade, Digital Realty Trust Inc. President and CEO Andrew Power said on the company's fourth quarter 2022 earnings call Feb. 16.

"The launch of ChatGPT 3.0 is a seemingly important milestone. Microsoft's incorporation of ChatGPT in the Bing last week, Google's coming launch of Bard, and Baidu's ERNIE Bot all suggest that we are on the forefront of the broader introduction of AI, which could spawn a wave of adoption and a proliferation of use cases and ultimately drive demand for compute infrastructure at scale."

Although these technologies are in the early stage and their effects on the datacenter sector remain to be seen, Power said Digital Realty is already working to understand how their requirements will evolve and is incorporating the information in the company's new designs.

The executive said the demand drivers that supported the company's growth over the last decade remain in place and well supported by ongoing digital transformation, migration to the cloud and the overall evolution toward centralized compute.

The push to target AI-focused companies is part of plans to diversify sources of capital to support customers' growing digital infrastructure needs while improving capital efficiency and returns for Digital Realty investors, Power said.