JECohen says AI-driven data center construction spending outpaces other office projects
XLK•AI value chain is driving markets
JECohen analysis flagged a broad AI value chain driving markets, spanning semiconductors, data centers, model providers, and software adoption.
Demand for GPUs and memory chips rose on heavy training needs and persistent inference workloads; hardware pricing pressure lifted valuations.
High sector valuations are raising expectations
Information Technology sector valuations stood at 21.4x, implying high expectations; volatility reflects shifting views on demand versus efficiency gains.
Data center buildouts are outpacing other office construction
Data center construction spending accelerated since ChatGPT’s late-2022 launch, outpacing other office construction; buildouts face power and cooling constraints.
Investors questioned whether hundreds of billions in AI infrastructure spending will earn adequate returns as models become more efficient.
