AI’s insatiable thirst for data centers will need $3 trillion in investment in next 4 years, report reveals

Banks and other institutional lenders will have to play a ‘prominent role’ to provide financing for the projects, according to Moody’s Ratings

Data centers will draw at least $3 trillion worth of investment over the next four years, much of which will have to come from creditors, according to a new report from Moody's Ratings.

The servers, computer equipment, facility construction and maintenance, and cloud services needed to run the data centers will require the massive investment, according to Bloomberg.

Most of the money for the new data centers will come from big tech companies, which rely on the warehouse-sized facilities for their various products — including and especially artificial intelligence development — and storage needs.

Microsoft, Amazon, Alphabet, Oracle, Meta and CoreWeave represent $500 billion in pending data center investments this year, according to Moody’s report.

But they won't be the only ones pumping cash into the new facilities. Banks will have to play a "prominent role" to provide financing for the projects, according to the report. Moody's also noted that reliance on other institutional investors will become increasingly common due to the mammoth amount of capital needed for data center construction.

The Google Midlothian Data Center in Midlothian, Texas. A new report from Moody’s Ratings said $3 trillion worth of investment will be needed to meet Big Tech’s demand for data centers (Ron Jenkins/Getty Images)

OpenAI — the makers of ChatGPT — and SoftBank have teamed up to invest $1 billion in infrastructure company SB Energy, which focuses on data center development. OpenAI has tapped SB Energy to build a data center in Texas as part of its $500 billion Stargate project, according to the Financial Times.

In Arkansas, a new $6 billion data center was announced on Monday. The project represents the largest single business investment in the state's history, according to ABC 7, and will be funded primarily by AVAIO Digital and its tech customers that will rely on the data center for storage and compute.

Right now, the infrastructure to realize the AI future being touted by tech billionaires is increasingly being built on debt, leading to fears that a bubble with trillions on the line is building around the industry.

Despite those fears, the demand for new centers is still on the rise. Moody's report predicts that the race to build the facilities is still in its "early stages," and will ramp up over the next year to 18 months.

While data centers have been around for decades, their explosive growth has not gone unnoticed. Pushback from residents and regional lawmakers concerned about rising energy and water prices as well as noise pollution and neighborhood disruption has, in some communities, stalled or killed prospective data center developments.

That trend will likely continue as more and more land is snatched up for the windowless, monolithic facilities that house the servers and computer equipment at the heart of data centers.