AI Infrastructure Drives $750 Billion in Data Center Investment

Nvidia stock was trading higher Tuesday. (Akio Kon/Bloomberg)

With demand for AI infrastructure reaching incredible heights, Bernstein calculated how the announcements for new data centers will add up.

It’s a big number.

“Total investment in upcoming and under-construction data centers has soared to ~US $750 billion,” wrote analyst Alex Wang on Tuesday.

The initial investment in the Stargate data center project accounts for $100 billion of the total, which is scheduled to deploy later this year and in 2026.

The advent and success of reasoning AI models has been a driver for demand. Reasoning AI models reflect more thoroughly on a query by performing numerous thought computations and searching the web for information before they respond.

OpenAI released o1 in September, followed by o3 in April. Google released a reasoning-capable Gemini model in December, while Anthropic and xAI released reasoning models in February.

The increase in AI expenditures is good news for Nvidia, which is the market leader for AI computing hardware and solutions.

“NVIDIA’s GPU solutions remain best-in-class today. Its GPU deliver computing power several times greater than that of ASICs [application-specific integrated circuits], and utilizes cutting-edge HBM3E [memory]. Its full-rack solutions provide unmatched scalability,” the analyst said.

In midmorning trading, Nvidia shares were up 0.6% to $159.26.

Wang also said AI is breaking records in the start-up funding area. He notes investments in AI start-ups reached $60 billion in the first quarter, the highest quarterly figure ever, accounting for 53% of all start-up funding.

Write to Tae Kim at tae.kim@barrons.com