The article highlights the ongoing global expansion of data centers driven by AI advancements since ChatGPT's debut in 2022. Despite DeepSeek's claims of cost-effective AI model training, significant investment in data centers and equipment remains necessary. The credit markets have been relatively stable, with limited bond-spread widening, indicating less perceived risk compared to stock markets. The article also notes that while some companies delayed bond sales due to AI valuation uncertainties, others resumed activities as market conditions stabilized.
Key takeaways:
- The market turmoil caused by DeepSeek's chatbot has led to a reevaluation of the credit frenzy surrounding artificial intelligence.
- Despite concerns, major investors like Blackstone Inc. believe digital infrastructure remains essential, though some landlords and credit providers are worried about potential obsolescence.
- DeepSeek's ability to train AI models at a lower cost could impact demand for data centers, but experts argue that infrastructure demand will still grow, albeit at a potentially slower rate.
- Wider credit markets have remained relatively stable despite the turmoil, indicating less perceived existential risk compared to stock investors.