The flood of capital pouring into AI infrastructure is raising the risks of overcapacity as the world’s biggest investors look to cash in on the artificial intelligence boom, according to Ares Management Co-President Kipp deVeer.
"If you look historically in areas like this over the past 20 or 30 years, typically when this much capacity comes online, some of it at the end of the day has to be marginal,” deVeer said, speaking on the sidelines of the Greenwich Economic Forum in Connecticut on Tuesday. "These trends tend to lead to overbuilds in certain places, so us being selective and measured in what we build is important.”
Alternative asset management giants including Blackstone, Brookfield, Apollo Global Management and Ares have poured into data center projects as a way to cash in on booming demand for processing power that’s been unleashed by the advent of artificial intelligence. Many have pitched their investments as a more reliable way to play the AI boom while avoiding the risks of a gold rush into AI stocks, where it is hard to predict winners and losers.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.