UII UPDATE 224 | Q4 2023
Intelligence Update

Hunger for AI will have limited impact on most operators

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Daniel Bizo
14 Dec 2023
8 min read

The recent intrigue and fascination with artificial intelligence (AI) marks a new high in the evolution of AI and has led to a flurry of investments, spearheaded by technology giants; along with some well-publicized corporate drama over the control of OpenAI, the posterchild of cutting-edge AI research. The fervor around AI has extended to the data center industry, which is now bracing itself for a significant increase in demand for net new capacity and the technically challenging requirements of providing sufficient power and cooling.

A closer look at the evidence, however, suggests that the near-term impact of AI will likely be moderated by the limited supply of key chips and the strained data center equipment supply chains. Although the longer-term outlook remains uncertain, AI will likely have a more significant long-term effect on most data center facility and IT infrastructure — not just as a deployed workload, but as an underlying force shaping the industry.

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