Why Will Speculative Data-center Landlords Get Hurt?

Alex Davis does not think there are too many neoclouds. He thinks there are not enough good ones. Alex Heath reads back a line Davis wrote: back owner-users, not speculative landlords, because this will not end well. Davis agrees. The people he means are projects that are not well funded, that take five years to build what should take two, or that hold a piece of land, a large family parcel in Texas is the example, without a real way to find customers or financing.

Memory prices have gone to about five times where they were two years ago, and they have doubled in the last year. That cost was not in the old math. Chips are then up about 15 percent each, and a newer chip is already the next question, so a buyer is choosing whether to purchase now or wait. Someone visiting the business, who is not current on changes that move daily, can put a lot of debt on the project and never end up with chips.