Digital Realty's CEO points shareholders past the AI labs to a $20bn pipeline
Andrew Power told CNBC that cloud and enterprise demand has outrun supply in his markets for years. The $3 trillion real-estate forecast investors are leaning on comes from JLL, a firm paid to broker that space.
The Investor · Invest desk
What happened
- Shares of Digital Realty and Equinix, two of the largest data center REITs, slumped on Monday after weekend warnings about the pace of AI development.
- CEO Andrew Power said slowdown pledges from Anthropic, OpenAI and xAI do not mean "pencils down" for AI or for the real estate that supports it.
- Digital Realty's development pipeline under construction stands at $20 billion, double the $10 billion it reported at the end of 2023.
- The company operates roughly 3 GW of capacity across 300 facilities in 55 metropolitan areas, and says it has a further 6 GW of development runway.
Why it matters
- What doesn't add up contradiction The $3 trillion real-estate number and the reassurance about adoption both come from JLL, which sells end-to-end data center real estate services, so the forecast and the comfort share an interest.
- Who's exposed exposure Committed construction spend sits ahead of signed rent, so a leasing pause reaches shareholders through the funding model long before it shows up as vacancy.
- What it limits constraint Where regulators cap approvals on energy grounds, as Singapore has, growth depends on power being released rather than on model release schedules.
- Who has to decide decision Holders now have to choose which number prices the stock: what the AI labs announce about their own pace, or the capital Digital Realty has already put in the ground.
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Power's case rests on a crowding effect inside his customer base. Hyperscalers, he said, have had to choose between growing their commercial cloud businesses or allocating capacity to AI labs [5]. If the labs defer orders, the cloud workloads that lost those internal bids are still queued, and they need the same buildings. "There is tremendous cloud computing growth," Power said, and those demand trends "have been stifled in these days of AI" [4].
The trillion-dollar framing does less for a shareholder than its size suggests. McKinsey puts the capital outlay needed to meet total data center demand by 2030 at nearly $7 trillion [9]; JLL puts the real estate portion at $3 trillion over the next five years [10], which is about 43% of the total [26] and roughly $600 billion a year [27]. Digital Realty's $20 billion under construction is 0.67% of the JLL number [28].
What is specific to this company is smaller and more checkable. About 3 GW operating across 300 facilities averages near 10 MW a site [29], with a claimed further 6 GW of runway, twice the operating base [30]. Its markets are Northern Virginia, Dallas, Chicago, Singapore, Tokyo, Frankfurt and Amsterdam [7]. "Our markets' demand has been outpacing supply now for several years," Power said, and "those workloads can't choose any one of the 50 states" [6]. Singapore has restricted new approvals on energy grounds [22]; Digital Realty holds a provisional 50 MW allocation there, alongside a 6.4 MW opening in Nairobi and a 22 MW joint venture in Ankara, which together come to 78.4 MW, about 2.6% of what it already runs [21][31].
The $3 trillion figure comes from JLL, which sells end-to-end data center real estate services globally [11], and so does the adoption argument. "The real growth in data centers over the next handful of years is in inference," said Andrew Batson, JLL's global head of data center research and strategy [13]. He added: "Only 1 in 4 Americans use AI daily, so even if models are slow to be released, there is significant runway for adoption to grow and data center demand to increase" [14]. Batson also pointed to Blackstone, BlackRock and KKR, which he said "have high conviction in this space" [15].
The doubling of the pipeline means roughly $10 billion of construction added since the end of 2023 [25]. Power said the company "positioned the balance sheet in probably the most liquidity, the lowest leverage, the best place it could be in any potential storm" [18]. Digital Realty did not disclose how much of the $20 billion is pre-leased, and that share is what separates underwriting from optimism.
I would expect the supply argument to hold where permits and power bind, and Northern Virginia, Singapore and Tokyo are those places. The counter-thesis is simple: a slowdown at the labs removes the highest bidder, and rent per kW on new and renewing leases moves before occupancy does. Crypto Briefing wrote that for long-term holders the more relevant number is probably the $20 billion pipeline, not the short-term price movement [23]. That holds if the pipeline is spoken for.
What to watch
- Any disclosure of the pre-leased share of the $20 billion under construction, which is what decides whether the doubling since 2023 was underwriting or hope.
- Whether Singapore converts Digital Realty's provisional 50 MW allocation into a firm approval, given the energy-based restrictions on new capacity.
- Hyperscaler commercial cloud bookings: Power's crowding argument predicts they reaccelerate if allocations to AI labs ease.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence45
- Adoption45
- Hype gap+25
- Incentives80
- Confidence55
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
Digital Realty and Equinix, two of the largest data center REITs, saw their stocks slump on Monday following weekend warnings over AI advancements.
- [2]
Digital Realty CEO Andrew Power spent part of September 15 on CNBC, in an exclusive interview with the Property Play newsletter.
- [3]
Power said the pledges for a slowdown by major AI players Anthropic, OpenAI and xAI do not mean "pencils down" for AI and the real estate that supports it.
- [4]
"There is tremendous cloud computing growth. Frankly, from my business lens, my seat, I think those demand trends, which are massive drivers of our business, have been stifled in these days of AI."
- [5]
Power said hyperscalers have had to choose between growing their commercial cloud businesses or allocating capacity to AI labs.
- [6]
"Our markets' demand has been outpacing supply now for several years. There's pent-up need for infrastructure in those markets. There's locational sensitivity. Those workloads can't choose any one of the 50 states."
- [7]
Digital Realty's markets include Northern Virginia, Dallas, Chicago, Singapore, Tokyo, Frankfurt and Amsterdam, where Power said customers are competing for the same space.
- [8]
AI could account for about 70% of global data center capacity demand by 2030, according to a report from McKinsey.
- [9]
McKinsey's report said the capital outlay needed to meet total data center demand by 2030 will be nearly $7 trillion.
- [10]
The real estate portion of that outlay could account for $3 trillion in investment in the next five years, according to JLL.
- [11]
JLL provides end-to-end data center real estate services globally.
- [12]
Digital Realty's development pipeline totals $20 billion under construction, up from $10 billion at the end of 2023, according to the company.
- [13]
"The real growth in data centers over the next handful of years is in inference"
- [14]
"Only 1 in 4 Americans use AI daily, so even if models are slow to be released, there is significant runway for adoption to grow and data center demand to increase"
- [15]
Batson pointed to institutional money from Blackstone, BlackRock and KKR, which he said "have high conviction in this space."
- [16]
Batson said of institutional conviction: "That, on paper, still looks quite strong, despite some of the headlines here."
- [17]
Power said: "The first, most important part is, make sure that the daily gyrations, our stock price, don't affect our strategy, our business... We evolved our funding model a couple of years ago. We are an incredibly capital-intensive business."
- [18]
"We're on to the next iteration of that in raising private capital. We've also done one-off joint ventures, and we positioned the balance sheet in probably the most liquidity, the lowest leverage, the best place it could be in any potential storm."
- [19]
Digital Realty operates roughly 3 GW of data center capacity across 300 facilities in 55 metropolitan areas worldwide.
- [20]
The company has an additional 6 GW development runway beyond its current operating capacity.
- [21]
Digital Realty recently opened a 6.4 MW facility in Nairobi, Kenya, formed a joint venture to build a 22 MW data center in Ankara, Turkey, and secured a provisional 50 MW allocation for a planned site in Singapore.
- [22]
Singapore has been restrictive about new data center approvals in recent years due to energy concerns, making any approved capacity genuinely scarce.
- [23]
Crypto Briefing wrote that for long-term holders, the more relevant number is probably the $20 billion pipeline, not the short-term price movement.
- [24]
Analysts agree that a slowdown would not directly impact the physical needs of AI, because a change of pace would affect training of new models.
- [25]
The pipeline going from $10 billion at the end of 2023 to $20 billion means about $10 billion of construction was added since then.
- [26]
JLL's $3 trillion real estate figure is about 43% of McKinsey's nearly $7 trillion total data center capital outlay to 2030.
- [27]
$3 trillion of real estate investment spread over five years is about $600 billion a year.
- [28]
Digital Realty's $20 billion under construction equals about 0.67% of JLL's $3 trillion five-year real estate figure.
- [29]
Roughly 3 GW across 300 facilities averages about 10 MW per facility.
- [30]
The 6 GW development runway is twice the roughly 3 GW Digital Realty currently operates.
- [31]
Nairobi's 6.4 MW, Ankara's 22 MW and Singapore's provisional 50 MW total 78.4 MW, about 2.6% of the roughly 3 GW operating base.
- [32]
Batson's figure implies three in four Americans do not yet use AI daily.
Sources
2 independent publishers whose own reporting we read for this story.
- cnbc.comPotential AI slowdown is not ‘end of the world’ for data center real estate, says Digital Realty CEO
1 article · September 15, 2026
- cryptobriefing.comDigital Realty CEO says AI slowdown won’t halt data center demand
1 article · September 15, 2026
Topics and entities
Topics
- Data Center REITs
- AI infrastructure demand