"Goldman Sachs warns that datacenter investments may fail to pay off if the industry is unable to monetize AI models, but hedges its bets by saying that demand could also overwhelm available capacity by 2030. Investors have been pouring cash into datacenters, buoyed by the AI-driven demand for compute resources that has led to a boom in construction of new facilities in the US and elsewhere."
""A lot of investors have struggled with the hype and quantifying what this all means," Goldman Sachs senior equity analyst Jim Schneider says in the report, which provides four possible scenarios for how the datacenter game may play out between now and 2030, leaving investors to take their pick. Half of these scenarios forecast that demand for new bit barn capacity will drop off between now and the end of the decade, while one predicts it will come close to using up the entire available capacity,"
"The base case, which we assume means that Goldman Sachs Research thinks it is the most likely outcome, is that the balance between supply and demand is set to narrow significantly over the next 18 months, with datacenter occupancy peaking at around 93 percent sometime next year. After 2027, supply constraints are expected to ease up."
Investment in datacenters has surged due to AI-driven demand for compute, prompting a construction boom and forecasts of $1.6 trillion in capital expenditure by 2030. Doubts exist about whether AI model monetization will materialize and whether ROI will justify large datacenter investments, with many business leaders skeptical and demand projections questioned. Four scenarios outline possible futures through 2030: several project demand tapering off, one projects near-full utilization, and one projects demand exceeding supply. The baseline scenario expects occupancy to peak near 93 percent next year before supply constraints ease after 2027, making outcomes dependent on monetization and paid adoption of AI services.
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