(Bloomberg) -- The world is “grossly” underestimating how much the demand for artificial intelligence is going to expand the global market for data centers over the next five years, according to the co-founder of the cloud-computing unicorn CoreWeave.
The data center requests that CoreWeave is fielding on a daily basis “are absurd,” with many asking for entire campuses for themselves, Brian Venturo, co-founder and chief strategy officer, said Thursday at a Bloomberg Intelligence summit on generative AI in New York. “The market is moving a lot faster than supply chains that have historically supported a very physical business have been set up to do,” he said, predicting more “mega-campuses” that will stress power grids and spur political fights.
“There are going to be some things that this industry is going to have to work through,” Venturo said.
The generative AI boom is touching off a rush for data centers that has transformed Roseland, New Jersey-based CoreWeave into one of the hottest startups in technology. Bloomberg reported in March that the firm was in talks to raise funding in a transaction that would more than double its valuation to $16 billion. At the same time, Nvidia Corporation Chief Executive Officer Jensen Huang said he expects that $250 billion will be spent on data center gear annually.
Amazon, the top provider of rented computing power and storage, plans to spend almost $150 billion in the next 15 years on data centers to meet the expected explosion in demand from AI tools.
“It worries me,” Venturo said of setting up the infrastructure to handle the demand. “It’s a sprint. It’s a sprint that requires all the capital in the world.”
Further propelling the demand for new data centers is the fact that older ones are tough to revamp, Venturo said. The existing infrastructure supplying electricity to current data centers can’t support their expansions.
“You have to build new transmission lines,” he said. “You have to do new substation builds. There are just a lot of physical blockers here that are hard to overcome in the short-term.”
Asked whether the “hyperscalers” such as Amazon, Alphabet’s Google, and Microsoft are facing the same challenges, Venturo said, “I can tell you they already have.”
