Data Centre Time Bomb Ready to Explode, Rp 94,000 Trillion at Risk of Evaporating
The massive-scale construction of data centres occurring worldwide carries significant risks. An analysis from consulting firm Bain & Co warns that the AI industry needs to generate annual revenues of US$ 6 trillion, or approximately Rp 94,000 trillion, by 2031 for the capital already invested to be proportionate to the returns.
Otherwise, this entire giant investment risks becoming one of the largest misallocations of funds in history, according to a report cited by Futurism. The analysis indicates that direct revenue from AI services is only expected to contribute about US$ 1.8 trillion towards that target. This leaves a deficit of US$ 4.2 trillion that must be sourced elsewhere. This enormous gap requires unprecedented technological breakthroughs, even exceeding the impact brought by mobile phones and cloud computing in their respective eras.
David Crawford, the lead author of the report and head of the technology practice at Bain, stated that infrastructure is being built far ahead of actual demand. “What this industry needs is a wave of innovation far greater than what was ever brought by mobile phones and cloud computing,” he said.
To cover these construction costs, global economic growth must increase by approximately 1 per cent every year from the AI sector alone. The question now is whether applications and benefits will arrive in time to recoup the massive capital injections.
These concerns were first raised a year earlier by investor Harris Kupperman of Praetorian Capital. He emphasised that equipment in data centres has a short lifespan and must be replaced periodically. To cover replacement and maintenance costs alone, the industry requires trillions of dollars in annual revenue. If not, the massive construction of hyperscale data centres will only exacerbate the situation.
“If the math doesn’t make sense, scaling it up won’t fix it. It will only turn an industry crisis into a national economic crisis,” he remarked.
Expenditures by tech giants such as Microsoft, Amazon, Meta, and Oracle are expected to reach US$ 780 billion in 2026 alone. However, so far, the revenue generated from AI has not been large enough to cover these investments.
Jessica Wachter, a finance instructor at the University of Pennsylvania, warned that if this growth miracle fails to materialise, future generations will view the construction of these data centres as the “largest misallocation of capital in history.”