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The stocks of all seven US data center REITs (there are now six, following a merger that closed Thursday) slid down simultaneously this week, after a well-known venture capitalist and hedge-fund owner said at an investor conference that advances in processor technology will eventually lead to the demise of the data center provider industry.
But industry insiders say his views are overly simplistic, and that history has shown that advances in computing technology only create more hunger for data center capacity, not less.
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Since server chips are getting smaller and more powerful than ever, companies in the future will not need anywhere near the amount of data center space they need today, Chamath Palihapitiya, founder and CEO of the VC firm Social Capital, who last year also launched a hedge fund, said Tuesday afternoon, according to Seeking Alpha, which cited Bloomberg as the source:
Word that Google may have developed its own chip that can run 50% of its computing on 10% of the silicon has him reading that "We can literally take a rack of servers that can basically replace seven or eight data centers and park it, drive it in an RV and park it beside a data center. Plug it into some air conditioning and power and it will take those data centers out of business."
Related: Microsoft Profit Tops Estimates as Cloud Growth Marches On
Following the event,
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