AI Data Centers: When the Money Doesn’t Add Up
Somebody’s paying for all this concrete… hope it’s not my Xbox bill. (photo credit: Adobe)
I ran across a couple of blog posts from Harris “Kuppy” Kupperman over at Praetorian Capital. The guy’s a veteran hedge fund manager who’s seen a few booms and busts, and his recent pieces — Global Crossing Is Reborn and An AI Addendum — hit close to home.
In short, he’s talking about the AI data center gold rush. And when you see the numbers he lays out, it’s enough to make you stop and think.
Right now, the data center industry is spending about $400 billion a year building these things — up from roughly $150 billion just a few years ago. That’s not a typo. Four hundred billion.
Here’s the kicker: the revenue from all that capacity might only be $70–100 billion today. According to Kuppy’s math, they’d need something like $400 billion in annual revenue just to make the investment pencil out. That’s a long bridge to build before anyone sees the other side.
Now, don’t get me wrong — I hope they keep building. It’s been a blessing for construction, especially here in Virginia and the Carolinas. Frankly, it’s been good for me personally. I’ve been chasing these jobs for the past few years, and if it wasn’t for the data center boom, things would look a whole lot different across our region.
But reading Kuppy’s breakdown reminded me how brittle the industries we serve can be. You get comfortable with one big driver, and before you know it, that driver runs out of gas.
Speaking of running out of gas — I got an email from Microsoft the other day saying they’re bumping up the cost of Xbox Game Pass by 50%. That’s right, fifty percent. The funny part? I don’t even have an Xbox anymore. Got rid of it months ago. The kids haven’t missed it one bit. I went ahead and canceled the subscription, but it got me thinking — how many other companies are quietly cranking up prices like this to help pay for all this “AI infrastructure”?
I mean, Xbox isn’t an AI device… at least I don’t think it is. Maybe it is now.
Either way, it feels like everybody’s reaching a little deeper into our pockets to fund this next tech boom. And that’s fine, as long as we know the score.
So yeah, I’ll keep chasing the data center work — it’s been keeping a lot of folks busy and paychecks coming. But I’m also keeping an eye on the numbers. Because the last time Wall Street said “this time it’s different,” it wasn’t.
Credit to Harris “Kuppy” Kupperman for the insight. You can read his full posts here:
Seth Tandett
Seth Tandett is as solid as the concrete he works with. Based in Richmond, Virginia, he’s been part of teams delivering top-notch structural concrete work across central and southern Virginia—everything from multi-level frames to data centers and federal facilities.
These days, Seth drives business development at Baker Construction while hosting the Concrete Logic Podcast, where he cuts through the noise and gets to the truth about what’s really happening in the concrete industry.
When he’s not chasing projects or hosting the show, you’ll find him studying economics, digging into American history, or sitting in a duck blind waiting on the next flight of birds.
Tune in to the Concrete Logic Podcast and you’ll get exactly what Seth’s known for: sharp questions, blunt commentary, and real conversations about concrete. No spin. No fluff. Just the stuff that matters.
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