AI stocks slide after major CEOs unite to urge slowdown
AI stocks slide after major CEOs unite to urge slowdown. Digital Realty CEO Andrew Power, however, said the pledges for a slowdown by major AI players Anthropic, OpenAI and xAI do not mean "pencils down" for AI and the real estate that supports it.
What happened
Calls for a slowdown in the pace of AI development have hit related stocks in recent days and could have broad ramifications for every industry involved. You should listen to the warnings about AIAlex TurnerWe must stop companies from allowing AI to self-improve into an uncontrollable level of intelligence Major AI lab CEOs advocated for slowing the pace of AI development this weekend. Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuKey PointsDigital Realty and Equinix, two of the largest data center REITs, saw their stocks slump after warnings over AI advancements.
In this articleDLREQIXFollow your favorite stocksCREATE FREE ACCOUNTDigital Realty Data Center in Ashburn, Virginia, March 17, 2025. " Analysts agree that a slowdown would not directly impact the physical needs of AI, especially given what a change of pace would actually affect, which is training in new models. Power said that while data center REIT stocks get punished, his message to shareholders is that the company has been ready for this. I myself would guess AI takeover chances at roughly one-in-three–not a coin flip, but high enough to justify urgent action.
The wider picture
In 2023, the CEOs of some of the best AI labs signed a public statement that “mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war. ” Another signer: Geoffrey Hinton, a Nobel prize-winning scientist who architected the modern AI revolution. He now regrets his work and urges governments to rein in AI companies before it’s too late. skip past newsletter promotionafter newsletter promotionMisaligned, out-of-control AI won’t care if you’re Labour or Reform, Democrat or Republican, British or American or Chinese.
I urge you to demand that your government produce a serious AI safety agreement that provides enough time and confidence to safeguard the world and all her peoples. Anthropic CEO Dario Amodei said the industry "must slow the pace at which we improve the capabilities of AI models," amid growing concerns over risks from AI. Andrew Batson, global head of data center research and strategy at JLL, said there is still significant runway for adoption of current AI models.
Leah Millis | ReutersA version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. While cloud, storage, enterprise IT and internet services all require data center capacity, artificial intelligence has quickly become the dominant driver of demand.
What has been reported
AI could account for about 70% of global data center capacity demand by 2030, according to a report from McKinsey. The report said the capital outlay needed to meet total data center demand by 2030 will be nearly $7 trillion. Just the real estate portion of that could account for $3 trillion in investment in the next five years, according to JLL, which provides end-to-end data center real estate services globally. "There's tremendous digital transformation happening that is not connected to AI," said Power in an exclusive interview with Property Play.
Frankly, from my business lens, my seat, I think those demand trends, which are massive drivers of our business, have been stifled in these days of AI. "Power said hyperscalers have had to choose between growing their commercial cloud businesses or allocating capacity to AI labs. He also said not all markets will be impacted equally. Digital Realty's markets include Northern Virginia, Dallas, Chicago, Singapore, Tokyo, Frankfurt and Amsterdam, where Power said customers are competing for the same space.
What happens next
"Our markets' demand has been outpacing supply now for several years. There's pent-up need for infrastructure in those markets. Those workloads can't choose any one of the 50 states," said Power. "We have a global company portfolio, so we've got data sovereignty and support in other countries as well. Get Property Play directly to your inboxCNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox.
"The real growth in data centers over the next handful of years is in inference — that's the adoption by businesses and citizens of the tool into daily workflow," said Andrew Batson, global head of data center research and strategy at JLL. "Only 1 in 4 Americans use AI daily, so even if models are slow to be released, there is significant runway for adoption to grow and data center demand to increase," he said.
The report has been compiled by The Daily Waves using information reported across cnbc.com, theguardian.com. Details are presented according to the information available at the time of publication and may change as authorities, organisers or other relevant parties provide updates.