TheWHIR – Experts Dispute VC’s Forecast that Caused Data Center Stocks to Slump

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.

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:

More of TheWHIR post from Yevgeniy Sverdlik

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