A new view from one of the world’s largest alternative asset managers believes that the AI buildout is grounded on fundamentals, not fantasy, and that the current wave of data center investment looks nothing like the speculative telecom mania of the early 2000s.
In a new CNBC interview, Brookfield CEO Bruce Flatt says today’s hyperscaler expansion is anchored by real demand, real cash and real productivity gains across the global economy.
The firm, which manages over $1 trillion in assets, says it is teaming up with hyperscalers that have massive cash stockpiles and stellar credit ratings.
“Our business is just financing the global best. So we’re partnering with Google, and we’re partnering with Microsoft. We’re partnering with countries of the world. And most of those have high A, double A, or triple A credits. And therefore, we’re just financing their businesses for long periods of time.”
Looking back at the dot-com era, Flatt says the tech cycle collapsed because fiber networks were built without guaranteed customers. Today, the Brookfield CEO says the dynamics have changed because customers book compute capacity before building data centers.
“Unlike cycles before, which you refer to when fiber was laid down, there were no counterparties on the other side. So there will be mistakes made by some. But if you know what you’re doing on building, if you have the capital right, and if you have counterparties on the other side of your transactions, this is a long, long cycle, and we will all do very well in it.”
Flatt then addresses the concern that hyperscalers are taking on too much financial risk. He notes that the economics of AI deployment are already proving themselves at the firm level.
“They’re all investing for a very long-term future, and what I can tell you is from our, we have 400 companies where we’re deploying artificial intelligence, and the early stages of deployment of artificial intelligence is very meaningful to business and those that [run] with it are going to excel.”
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