Data centre euphoria starts to ebb after DeepSeek's emergence

Market turmoil sparked by its chatbot has left some rethinking credit frenzy around AI

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NEW YORK - The recent market turmoil sparked by DeepSeek's chatbot has left some rethinking the credit frenzy around artificial intelligence (AI).

Corporate giants told money managers that the Chinese startup's cheaper models will only spur more demand for the technology and the sprawling infrastructure it requires.

While big investors such as Blackstone president Jon Gray say that "digital infrastructure remains essential", behind the scenes, landlords and credit providers say that the situation is more nuanced, and some are starting to fret.

A senior executive at one of the major data centre landlords expects the firm's borrowing costs to increase because lenders will seek to protect themselves against the risk of the properties becoming obsolete from a DeepSeek-style disruptor.

Another asset manager, which both acquires and provides credit for the real estate, said that its lending ambitions are now less certain after the market panic.

The danger, the person added, is that AI mimics the green investing boom, when a rapid influx of money into clean energy created an oversupply of assets.