14 May 2026

Season 8, Post 17: HALO effect

“All revolutions need infrastructure” was one powerful message your author heard at a conference he attended earlier this week. “It’s like a dog chasing its tail,” said another presenter, in response to how suppliers to the data centre gold rush are having to adapt. If AI is going to remain in the vanguard, then there will be a clear halo effect for the metaphorical shovel makers. Some prefer to use the acronym HALO, to capture the idea that certain operators in heavy-asset, low-obsolescence industries may also prevail as winners.

Around $700bn is the figure that the top US hyperscalers (Alphabet, Amazon, Meta, Microsoft and Oracle) have said they will spend on AI infrastructure in 2026. Most analysts reckon that roughly half this figure comprises expenditure on GPU and CPU chips. The remainder needs to go on land (to house the data centres), power, infrastructure, cooling equipment and so on. That’s a lot of heavy assets, with low obsolescence.

A 1GW data centre may require around 100,000 tonnes of steel. For context, London’s Wembley Stadium contains about 23,000 tonnes and the Shard, its tallest building, some 12,000 tonnes. So that’s a lot of metal. Another presenter shared an equally “staggering” (his words) statistic: a new planned data centre in Utah will consume 9GW of power capacity daily. Utah State currently consumes 4GWh of power every 24 hours while London gets through 7GWh on a busy day. The entire Utah project will span a proposed 60 square miles.

The consistent message across presenters was that there is a structural imbalance between demand and supply. This explains why some new companies are having to wait up to ten years for grid connections. It also provides an explanation for why around half of all US data centre projects are currently being delayed or deferred. A more optimistic view from one participant suggested that “we are on the cusp of an investment super-cycle.” It seems clear that critical infrastructure providers will probably continue wearing their halos for some time.

14 May 2026

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