The news: The rapid adoption of artificial intelligence (AI) is ushering potential data center industry growth as it transitions to serve growing AI demand.
Hyperscalers like Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and Oracle are expected to drive sales of chips made by Nvidia, AMD, and Intel to build out data centers to accommodate increasingly demanding AI workloads.
Why it’s worth watching: The move to AI-specific data center services ushers in an “AI Era” that is transitioning away from the “Cloud Era,” or the previous decade’s focus on cloud computing and mobile platforms, per VentureBeat.
The AI Era will cost more: Over the past year, the industry has seen rising financing and building costs, longer build times, and severe power limitations in key markets.
Our take: Cloud services will continue to see disruption as interest and investments in generative AI grow. Cloud providers will need to carefully balance serving existing customers while creating new opportunities for the ongoing surge in AI interest.
The cost of adopting net new AI technologies and increasing capacity will likely be passed on to customers as the cloud industry transitions to serve AI needs.
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