Data Center Real Estate in High Demand on AI Boom

Rich Hill, Global Head of Real Estate Strategy & Research at Principal Asset Management, discusses global real estate markets and how the AI boom is powering real estate investing for data centers.

Artificial intelligence isn’t just reshaping industries — it’s creating a new infrastructure layer to support them. The servers that run large language models have to live somewhere, and that somewhere has quickly become one of the hottest asset classes on earth.

For a lucky few, the boom is minting fortunes. As data centers — and the billionaires made off them — multiply, retail investors seeking exposure can focus on the rapid rollout of AI infrastructure and the companies that supply it.

The most important input for a data center is the advanced chips that allow the large language models to run, and that’s where the first wave of profits has landed. Nvidia remains the flagship, as its GPUs power nearly every major AI model. Broadcom and Advanced Micro Devices are close behind.

Building and running data centers takes much more than silicon. Behind the scenes, a constellation of companies keeps the industry humming: Corning makes the fiber-optic cables that connect servers, Arista Networks and Celestica build the networking gear, Dell and Penguin Solutions handle the assembly.

“This whole AI wave is lifting a lot of boats,” said Woo Jin Ho, an analyst with Bloomberg Intelligence who covers the hardware and networking sector. The easy money may have been made on chips; the real opportunity could be in the quieter corners of these high-security warehouses.

If you’d rather skip the tech jargon, think property instead: Data centers are essentially high-security buildings for computation in high demand.

Real estate investment trusts (REITs) such as Equinix and Digital Realty Trust own many of them, collecting steady rent from tenants such as Amazon, Google or other cloud providers. Tower operators, including American Tower and Crown Castle, which move data in and out of those facilities, offer another angle and a more stable way to ride the boom.

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