We saw the market’s reaction to the election news, and I think that there is an accidental upside to what is going to happen in the next few years.
If 80% of the states that are building data centers right now stopped issuing new permits, we will be okay.
I have heard through the grapevine that a small handful of PE firms have stopped funding new data center buildouts for fear of overcapacity.
We generally tend to be irrationally exuberant in emerging markets, and at the same time, we are not certain how optimal the current slate of rushed buildouts will be. Most of the people who are building data centers, as well as existing data centers themselves, will probably spend time optimizing internal capacity, which is a good thing. There will be some R&D, and there will be some “sell the hardware to tier 2 companies, or on-prem companies with lesser requirements” as they proceed on an accelerated hardware replacement plan, but also, per a previous post, we might not need that much more sophisticated hardware because we are still not hitting an upper bound in software.
It does open the door to a new hardware opportunity. I think that there is room in the marketplace for an extrinsic bus technology that acts as a super-fast connector between 2 to N machines to unify their memory and processing space. If you know people in the hardware space who are looking for ideas to make both data center rack owners and on-prem purists happy, this would be one of them.
Unrelated to all of this, I want to give a shout-out to my good friend Murray Vince and his new book on California LLCs. It is a self-interested shout-out. I am resuming my quest to steal nickels from Jeff Bezos, and if you want to help out and put those nickels in Johnny’s pocket, click this link to go buy it in paperback or Kindle edition.
Here is the lock on the deal: The VagueBooker’s Guarantee: If you regret the purchase, let me know, and I will figure out how to make it up to you.
It doesn’t get much better than that, does it?
