For two decades, data centres were relatively safe, lucrative real estate investments. They attracted investors because they served as digital infrastructure — the essential plumbing that keeps the internet running.

The growth of artificial intelligence (AI) and its increased demands on computing power has meant data centre builders are in a race to build out sufficient supply.

But in the past two weeks, investors have started to have genuine concerns about the long-term viability of these businesses. On Wednesday, shares in NextDC, one of Australia’s largest data centre builders, collapsed by 40% after it said delays at its flagship Melbourne site meant its revenue forecasts would fall short of forecasts.

These delays have come about after the local community raised significant concerns about the impact of NextDC’s M3 data centre expansion. Electricity distributor Jemena paused the construction of the giant concrete power poles that had been snaking their way along Footscray streets, after local councils raised concerns about the impact on residential neighbourhoods.

These 22-metre power poles are crucial to NextDC’s operations in Footscray. Data centre operators make their profits from selling access to the massive amounts of power that AI chips need. Without that power, these facilities cannot remain viable.

NextDC is not alone in facing significant headwinds. Data centre company Firmus abruptly cancelled its multi-billion dollar listing on the Australian stock exchange, due to a lack of investor........

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