Charles HudsonFounder and Managing Partner, Precursor Ventures

Are we overestimating AI infrastructure demand?

29 Sept 2025 · 1 min

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Charles Hudson worries the AI industry is overbuilding infrastructure like fiber and data centers based on shaky demand forecasts. He points to the 1990s fiber glut as a cautionary tale: billions invested in capacity that went unused when the boom didn't materialize as expected.

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My worry is humans are very bad at forecasting demand at times of rapid change. And while we eventually needed most of that fiber we put in the ground in the late 90s, we didn't need it in the 2000s. And I worry that what happens if it turns out we don't need all of these data centers that were built? That's a whole. That's probably another podcast about, like, private credit data centers, power and the infrastructure, real asset investments that are happening outside that are all predicated on the ability to accurately predict future demand for AI. And I'm not so sure we've ever been good at doing that.