Data centers are still the headline, but the real pinch points are power and real estate.
In this podcast, Motley Fool analyst Emily Flippen is joined by contributors Anders Bylund and Dan Caplinger to map the data center buildout, the risks of “overbuild,” and where investors can look for exposure without paying bubble prices.
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This podcast was recorded on Jan. 13, 2026.
Emily Flippen: The opportunity in data centers is increasingly looking like an opportunity in power and real estate. We’re digging in today on Motley Fool Money. That’s so Today is Tuesday, January 13. Welcome to Motley Fool Money. I’m your host Emily Flippen, and today I’m joined by Fool analysts Anders Bylund and Dan Caplinger as we dig into data centers and the different ways investors can play on their buildout without baking in too much risk. We’ll walk through all the different players that are helping make data centers a reality, how sustainable the buildout really is, and how mega investors are helping fund them at scale, but to start we have to talk about why we’re discussing data centers today. Of course, everyone knows large tech companies have been building data centers at breakneck speeds to help facilitate the AI ambitions that we all know and some of us love. Artificial intelligence requires massive amounts of data center capacity to not only handle the queries that are being sent by you, I, and enterprises to LLMs, but also to help iterate and constantly train those same models. But this is a topic that’s really hitting close to home recently for individual Americans alongside investors. I know myself, I live here in Maryland. I’m just a stone’s throw away from Northern Virginia. It’s ground zero for Data Center bill in the United States. CBRE has recently released reports noting that data center vacancies are at all time lows in the second half of 2025. Many big customers are pre-leasing out capacity into 2027 and beyond. For the people living nearby this means higher electricity costs and data centers obviously require massive amounts of power to run. That’s some of the backdrop. Dan, I want to start with the capacity. I think investors’ minds often immediately turned to the fear that the data centers that we see so far have actually been overbuilt. That’s given the narrative that we talk about a lot around fears around an AI bubble, but the information that we have that I just indicated, that only shows that demand has continued to outstrip supply. How does that build out look to you today?
Dan Caplinger: It’s funny, Emily because yes, I’ve heard those stories about how we’re overbuilding data centers left and right. But the fact is that most of those data centers that we’ve heard about, they haven’t even been built yet. Investors, I think are reacting more to news of the planned deployment of future data centers than they’re talking about than about data centers that are currently on the ground right now. Building completions, they’re going up pretty fast, but it’s not an overnight thing. There’s a lot of infrastructure. There’s a lot of supporting work that has to go into getting a data center up and running. It’s going to take years to get all the ones that are planned actually built. Now, yes there is some risk of a reversal if hyperscalers take their plans and get cold feet about, are we going to get the return on investment that we had hoped that we were going to get? Sure, that might make people pull back on their plans to complete some of the ones that are scheduled to get done in out years. But I think we’re a long way from that point, and right now the existing data centers that are up and running and operational are not enough to take care of the current demand that AI and other intensive computing applications are requiring.
Emily Flippen: There’s two parts to that equation. They are the people who need the capacity in order to fund operations, to fund the queries and the training that we talked about. There’s also the people who are actually funding the projects themselves who are offering capital. You need both part of those equations to make that work. So far, we haven’t seen cracks happening on either side of those equations, but that doesn’t mean that there hasn’t been public pushback just from the people who daily lives have been impacted from these expansions and Anders. That buildout that is happening and continues to happen as Dan mentioned, it has massive implications for things like energy consumption. The IEA projects that global energy consumption for data centers alone will double by 2030. In the United States, the Pew Research Center projects that AI based electricity usage will rise 133% in that same time period. I understand that a lot of investors hear that and they think the obvious takeaway is that there’s going to be a need for infrastructure investment. That’s a great opportunity for energy investments over the next couple of years, because you need energy to power those initiatives. What do you personally make of that?
Anders Bylund: Yes, there is definitely that side to it. But like you said, it’s a multi layered story. The big story here isn’t just that there is a big demand for more energy. It’s also that the imbalance between supply and demand means that prices are rising and it’s hard to keep up with the buildouts as fast as you need to. A lot of hyperscalers are doing is, so they’re taking control of their own destiny and they’re building their own energy sources. Building or buying, I should say. For example, recently Microsoft has restarted or signed a deal to restart three Mile Island with the traditional reactors that are already there, but they’re going to get replaced over time with smaller modular reactors. Nuclear power in Microsoft hands, but they’re not the only ones. Amazon is doing the same thing. They recently bought a nuclear powered campus with plans to install modular mini reactors and Google isn’t exactly doing that. Instead, they’re signing deals with independent companies like NextEra Energy which is another supplier modular nuclear reactors. It’s nuclear is making a comeback a decade or so after Fukushima, but in a different form. Maybe this will go over with the people and regulators. I don’t know, but it’s one way to get your hands on cheaper energy. In the long run it is still not cheap to build, but it will get affordable to run. That’s one way to get the power you need for your data centers.
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