The data center investment macro story centers on hyperscalers such as Microsoft, Alphabet, Meta, and Amazon Web Services, whose massive cloud computing services are becoming the backbone for AI workloads, including ChatGPT and others. However, as we've previously noted, the data center buildout has run into
supply-chain snarls, including memory chip shortages, power-grid constraints, and even a shortage of turbine blades for natural-gas generators.
The data center boom powering the AI revolution is certaintly impressive to watch unfold, but it won't be a straight line from here as the US attempts to hold the number one spot in the global AI race. Challenges are mounting, and the latest coverage on this comes from a conversation Goldman analyst Brian Singer had with Mark Monroe, a former principal engineer in Microsoft's Datacenter Advanced Development Group, who warned that data center buildouts face three major headwinds.
Here's a recap of the conversation between Singer and Monroe, which focused on three key constraints: power, water, and labor.
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