I Squared Capital Warns of AI Data Center Overexposure
Sadek Wahba cautions against over-investing in AI data centers due to technology obsolescence risks while highlighting a $100 trillion global infrastructure need.
Managing Partner at I Squared Capital Sadek Wahba warned of over exuberance regarding investments in AI data centers, citing technology obsolescence as a significant risk to these assets. While acknowledging the current AI boom, Wahba argued that the broader global infrastructure requirement over the next 15 years is approximately $100 trillion, encompassing energy, utilities, transport, and environmental sectors.
Wahba noted that private capital is essential to meeting this demand, pointing out that the largest investment firms deployed one trillion dollars in infrastructure-related AI investments in 2026. To mitigate risk, I Squared Capital limits its AI data center exposure to less than 10% of its portfolio, diversifying into aircraft components, leasing, and public school buses.
Regarding the political climate in the United States, Wahba asserted that infrastructure investment remains a bipartisan effort and suggested that the composition of Congress will have little impact on future build-outs. Other industry perspectives echoed these concerns, with the firm Fortification arguing that using credit for AI data centers is inappropriate due to equity-like risks, and Carlisle United F.C. publishing a paper on the risks of private capital becoming overexposed to hyperscaler funding needs.
