THE BARE STORY
HSBC Chief Executive Georges Elhedery said artificial intelligence is transforming business operations, while cautioning that not every data center investment has strong fundamentals.
Elhedery said lenders and investors should examine contract pricing and the quality of tenancy agreements before backing data center projects. HSBC is involved in financing and operating data center facilities, according to the bank.
Market participants have increasingly focused on whether AI infrastructure companies can generate sufficient returns on capital, rather than on the scale of their spending. Analysts cited rising financing, construction and depreciation costs as risks for companies that borrow heavily to expand computing capacity.
JPMorgan Chase has estimated that data center and related AI companies could issue $4.1 trillion in debt by the end of the decade. McKinsey has projected global data center spending could reach $7 trillion by 2030.
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