We’re experiencing an explosive growth in data centers, which promise energy, server capacity, and exciting economic prospects for communities across America. However, without a shift towards meaningful AI applications that tackle critical everyday issues—such as security, costs, healthcare, and waste management—we might be headed for a downturn in this data center boom.
Despite substantial investments from tech heavyweights like Amazon and Nvidia indicating that we’re still in a stable phase overall, there’s growing chatter about a capital expenditure bubble. To secure meaningful, sustainable returns on massive investments worth billions or trillions, we should be directing funds from current expenditures towards the development of relevant applications and services that will enrich our lives. Goldman Sachs forecasts this is an $8 trillion market waiting to be tapped.
Rethinking our Infrastructure Approach
According to Rewiring America, energy demands are set to rise by 128 gigawatts over the next five years, with data centers expected to contribute an additional 93 gigawatts.
This reveals how imperative it is to keep investing in the physical infrastructure required to fuel the AI race. Major players like Amazon, Nvidia, Google, and emerging startups such as Crusoe and OpenAI are rising to the challenge of ensuring that our grids can manage the anticipated demands.
There’s also a monumental opportunity to enrich the AI application landscape, enhancing the efficacy of data center investments.
If we look to the past, AWS is a prime example of how internal company resources can evolve into lucrative services offered to external clients. It started as a vital infrastructure to support Amazon’s own needs, expanding into a trillion-dollar service driven by the rise of web applications.
Similarly, the App Store, which was developed under Steve Jobs’ vision (and one I had the fortune of contributing to) laid the groundwork for unheard-of innovations like Uber, Instagram, and DoorDash. We aimed not just to support hardware sales, but to empower developers to create engaging applications deeply integrated into real-life scenarios.
In fact, back then, the investment firm Kleiner Perkins partnered with Apple to initiate the iFund, a $100 million initiative designed to transition the tech industry’s focus from physical capital to application creation, leading to a glut of diverse apps addressing every conceivable facet of life.
Today, AI stands poised to massively enhance applications but requires a surge of innovative products—integrating AI to offer solutions tailored to everyday challenges.
Data Centers: Powering Our Future
My time at Apple taught me a crucial lesson: it wasn’t enough to just kick off the smartphone revolution; we had to cultivate a thriving ecosystem. The success of the iPhone can be attributed to the innovative software and services that complemented the hardware. As we geared up to lead the app store market, we recognized the business potential in the application layer and expanded our community of developers.
I envision a pathway for similar success in AI, but an AI app ecosystem can only thrive if it aids in our real-world systems like healthcare, energy consumption, waste management, and more—all essential elements affecting everyday living quality.
These areas play pivotal roles in the lives of Americans nationwide. Yet, they also confront issues like stagnation and scalability challenges.
Consider waste management: at Mill, our mission revolves around creating a circular food waste system—transforming what was once discarded into valuable resources. AI can optimize these processes, saving time in daily tasks, enhancing the recycling framework, and refining collection routes with smart imaging technology.
Moreover, in the healthcare sector, AI technologies are starting to simplify drug development processes, automate routine tasks, and tailor patient experiences.
These aren’t lofty, ambitious projects—they’re achievable aims that highlight the need for ongoing partnerships between builders and investors.
Unleashing the Next Wave of Industrial AI
The true possibilities of America’s next trillion-dollar opportunities lie in applying AI meaningfully across industries—rather than merely training vast models. The success of this next wave hinges on our essential infrastructure but requires that we prioritize real-world applications. The time to act is now.
Working alongside America’s top innovators to deliver scalable, adaptable AI applications is imperative. This is how we safeguard the sustainability of data center growth, positioning AI alongside continuous market fluctuations. It’s crucial to prevent any excess within the data center industry, ensuring years of hard work and colossal investments pay off instead of going to waste.
I’m enthusiastic about the future of data centers as they evolve into launchpads for transformative innovations where AI enhances various sectors, ultimately empowering society and the economy. For this to happen, though, we must ensure that investments shift focus to developing valuable applications in tandem with a surge of creators prepared to deliver impactful real-world AI solutions.
Let’s roll up our sleeves!
The views expressed in Fortune.com commentary articles come solely from the authors, which may not reflect Fortune’s official stance.
This story originally appeared on Fortune.com.
