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The ‘Risky Place’ of AI Data Centers
The data center industry is “back to the wild west” of scrappy innovation, says Joe Morgan, Chief Operating Officer of data center company Patmos, who cautions the industry may be facing an overdevelopment bubble.
Speaking on the sidelines of the 2025 infra/STRUCTURE event in Las Vegas, Morgan tells Cool Vector Video-Podcast that too many large data centers are being built ahead of real clarity into the commercial applications of AI. “I do believe we are in a risky place from a bubble standpoint,” he says. “There are so many large projects that are being built – gigawatt facilities – but the industry will be completely different by the time those are actually turned online.”
The better play is to develop small-deployment, “purpose built” data centers that “have a use case that can start right now and justify the model,” says Morgan.
Morgan also discusses the challenge of retrofitting older facilities for new AI workloads. While external building shells may be adequate for new infrastructure – such as the Patmos development within the old Kansas City Star newspaper facility – the interior must be gutted and entirely purpose-built for AI workloads.
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