AI industry may be building too many data centers while existing GPUs sit idle, strategist warns

The artificial intelligence industry may be building more data centers than it needs while substantial amounts of computing power remain unused, according to David Sherman, AI and financial inclusion strategist at decentralized computing network io.net. Sherman warned that hyperscalers are increasingly relying on debt to finance massive infrastructure expansion, raising questions about whether those investments will generate sufficient returns. His comments come as AI stocks face a sharp selloff following hotter than expected US inflation data, which has renewed concerns about borrowing costs and the sustainability of the industry’s spending plans. “The scale of this selloff should be a warning sign for the AI industry,” Sherman said. He argued that demand for computing power remains strong, but questioned whether continuously building new infrastructure is the most sustainable solution. AI infrastructure spending faces growing debt concerns The warning comes as investors reassess the economics of AI infrastructure expansion. On Thursday, South Korea’s KOSPI index closed 7.57% lower after falling as much as 9.29% intraday. Semiconductor manufacturers Samsung Electronics and SK Hyni...