AI Infrastructure & Compute

AI Infrastructure REITs

Data center and AI infrastructure real estate funds.

Investment Overview

AI infrastructure REITs own and operate data centers, fiber networks, and power infrastructure supporting artificial intelligence workloads. Unlike compute tokens, these are publicly traded REITs offering dividend yields (3-6%) and exposure to AI infrastructure without crypto volatility. Leading REITs: Digital Realty (DLR) with 290+ data centers, Equinix (EQIX) with 260+ facilities, CoreSite (COR, acquired by American Tower). AI driving 20-30% annual data center demand growth. Key investment thesis: AI requires massive compute infrastructure; REITs provide picks-and-shovels exposure without betting on specific AI companies.

Market Context & Trends

Data center REITs surged 2023-2024 as hyperscalers (Microsoft, Google, Amazon) signed multi-billion dollar lease commitments for AI training clusters. Digital Realty leased 150MW to Microsoft for GPT training (2023). Equinix added 50+ AI-optimized facilities. However, AI data centers require 5-10x power density (50-100kW per rack vs. 10kW traditional); power constraints limit supply growth. REITs with owned power generation (nuclear, natural gas) trade at premiums.

How to Invest in AI Infrastructure REITs

Digital Realty (DLR): $60B market cap, 290+ data centers, 4.5% dividend yield

Equinix (EQIX): $85B market cap, 260+ IBX facilities, 2% dividend (growth-focused)

CyrusOne (CONE, Private): $15B buyout by KKR/Global Infrastructure, hyperscale focus

Iron Mountain (IRM): Data center + storage hybrid, 5% yield, AI expansion 2024

QTS Realty Trust (QTS, Private): $10B Blackstone buyout, hyperscale + retail colocation

Key Platforms & Access Points

Digital Realty (DLR): NYSE-listed, $60B market cap, global footprint (6 continents)

Equinix (EQIX): Nasdaq-listed, $85B market cap, interconnection + colocation leader

American Tower (AMT): Owns CoreSite data centers + cell towers, $100B market cap

Vanguard Real Estate ETF (VNQ): 10% allocation to data center REITs, diversified exposure

Pacer Data & Infrastructure ETF (SRVR): Pure-play data center REIT ETF, 3-5% yield

Key Investment Metrics

Occupancy rate: 85-95% typical; >95% indicates capacity constraints (bullish pricing)

Power capacity: Megawatts available; AI requires 5-10x traditional workloads

Customer concentration: Top 10 tenants as % of revenue; <50% preferred for diversification

Debt-to-equity: <6x safe for REITs; higher leverage = interest rate sensitivity

FFO (Funds From Operations): REIT equivalent of earnings; dividend coverage ratio

Risk Considerations

Understanding these risks is critical before investing in ai infrastructure reits.

Interest rate sensitivity: REITs declined 20-30% (2022) when rates rose; high debt levels
Power constraints: AI data centers need 50-100MW+; limited sites with sufficient power
Technology obsolescence: GPU generations change every 2 years; tenant refresh cycles
Hyperscaler concentration: Microsoft, Google, Amazon = 40-60% of revenue; dependency risk
Competition: Hyperscalers building owned data centers vs. leasing REIT space

Related Investment Opportunities in AI Infrastructure & Compute

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