AI industry may be building too many data centers while existing GPUs sit idle, strategist warns

An io.net strategist warns that rising debt and underused computing capacity could expose weaknesses in the AI infrastructure boom. The artificial intelligence industry may be building more data centers than it needs while substantial amounts of computing power remain unused, according to David Sherman, AI and financial inclusion strategist at decentralized computing network io.net. Sherman warned that hyperscalers are increasingly relying on debt to finance massive infrastructure expansion, raising questions about whether those investments will generate sufficient returns. His comments come as AI stocks face a sharp selloff following hotter than expected US inflation data, which has renewed concerns about borrowing costs and the sustainability of the industry’s spending plans. The warning comes as investors reassess the economics of AI infrastructure expansion.

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