Late last year, Malaysia, the UAE, the United States, and EU countries all announced data center projects worth hundreds of billions in an effort to meet the needs of artificial intelligence (AI) processing that is seen as profitable. This is also happening in China, but according to a report by MIT Technology Review, up to 80% of the country's AI data centers are not used due to low demand.
Among the causes of the decrease in demand is the DeepSeek innovation that trains AI models with powerful hardware at a lower cost. At the same time, the construction of data centers that do not meet current needs has caused the hardware used to not meet customer needs.
The euphoria of developing their own AI models that has decreased is also a factor. Many companies conduct preliminary studies before no longer continuing due to high cost factors. However, there is a belief that these data centers will eventually be used due to various restrictions imposed by the United States. When restrictions begin to become a big issue, this already built equipment can still be used by local companies that have no choice.
What is happening in China is also starting to happen in Western countries. This week, reports emerged that Microsoft has canceled agreements to use several data centers in the United States and Europe. This is a development that is sure to cause concern in other countries around the world.