Digital Realty CEO: AI slowdown not end of data center real estate

Digital Realty (DLR) and Equinix (EQIX), two of the largest data‑center real‑estate investment trusts, saw their shares drop sharply after a wave of analyst warnings about the rapid rise of artificial‑intelligence workloads. In the wake of reports that AI‑driven demand could outpace supply, investors questioned whether the current data‑center capacity is sufficient to meet the projected growth, prompting a sell‑off that erased roughly 6 % of each company’s market value in a single trading day.

The concerns stem from the fact that AI applications require high‑performance computing, low‑latency connectivity, and significant power and cooling resources. Analysts have cautioned that the pace of AI adoption may force data‑center operators to accelerate expansion plans, potentially leading to an oversupply of space and higher operating costs. Both Digital Realty and Equinix have already announced new projects aimed at meeting AI demand, but the market is wary that the timing and scale of these initiatives could dilute returns for shareholders.

As the data‑center sector continues to grapple with the implications of AI, the recent slide in DLR and EQIX shares underscores the volatility that can accompany rapid technological shifts. Investors will likely monitor how these REITs balance growth opportunities against the risk of overbuilding, while the broader market watches for signals that AI demand will translate into sustained, profitable expansion.