Chart of the week
Running away with it
What does this chart show?
As of March 2024, the U.S. has 5,381 data centers, 10x more than Denmark, our nearest competitor, and ~1.7x all other countries combined.
Why does it matter?
Since March 2008, U.S. stocks have outperformed international stocks by nearly 8% per year1. As the AI revolution takes hold, the U.S. continues to outperform and is increasingly driven by the Magnificent 7 (Apple, Alphabet, Meta, Tesla, Amazon, Microsoft, and Nvidia) who grew collective earnings by 76% in 2023 and 48% in 20242 and are spending ravenously on domestic AI infrastructure, data centers specifically3.
The companies, infrastructure, risk capital markets, and business environment seem to reinforce U.S. hegemony. Meanwhile in the EU, “Technological change is accelerating rapidly. Europe largely missed out on the digital revolution led by the internet and the productivity gains it brought: in fact, the productivity gap between the EU and the US is largely explained by the tech sector. The EU is weak in the emerging technologies that will drive future growth. Only four of the world’s top 50 tech companies are European.” - Mario Draghi in his report, The future of European competitiveness4.
The Bottom Line
Data centers are the backbone of the AI revolution, and relative U.S. infrastructure dominance provides continued tailwinds for our businesses.
Chart & Data Sources - Statista, Cloudscene
BG2 podcast
And I think this trend will accelerate in the future. The US and China will leas, Europe will lag far behind. AI data centers will consume a lot of electricity (until we come up with chips that consume less power and more efficient ways to use LLMs). Europe is already struggling to keep on the lights when there’s little wind and solar power. Coupled with their insistence that data be stored locally, European companies and economies will lag even more. It’s great to live in the US.