HSBC CEO Georges Elhedery has warned against treating every data center equally. He cautioned that companies and investors should review tenancy agreements, contract pricing, and the financial strength of individual projects before committing capital, even as artificial intelligence drives demand for new computing infrastructure. Elhedery described AI as a technology that could change how businesses operate, including HSBC. However, he argued that confidence in AI’s prospects should not translate into indiscriminate data center investment.
For example, in its 2025 annual report, the bank cited data centers and AI as transition-related industries it supports. McKinsey estimates that worldwide data center spending could reach $7 trillion by 2030. JPMorgan estimated that by the end of the decade, $4.1 trillion of the projected AI infrastructure financing could come from debt.
Because they are betting on something that is truly transformational.” You use AI every day, they are spread-insensitive.
Speaking to CNBC, Elhedery said “One has to be selective. Elhedery said AI could boost productivity and change how employees work, but he took a more cautious position on the infrastructure supporting the technology. “It’s going to put a lot of power back in the hands of our colleagues because of the level of productivity it gives them, so it’s going to be transformational, and we’re certainly very much on a journey to adopt it,” he said, adding that AI would help to “re-engineer the bank. Mohamed El-Erian, chief economic adviser at Allianz, said large technology companies were competing with governments for financing. “Governments are borrowing what they’re borrowing, plus they’re refinancing debt at a higher level of rates,” he said. ”[And] you have hyperscalers who last year raised $200 billion in bond financing, and are probably going to raise a trillion in bond financing this year.
You have to look at the quality of the tenancy agreements. You have to look at the pricing of these contracts. Not all of them are of that level of virtuosity that you can support strongly. Some of them may be more challenging. His warning comes as technology companies borrow heavily to build facilities, increasing concerns about project quality, debt levels and whether future demand will support the contracts behind each development. Data centers house the servers used for AI systems and cloud computing, and their financial performance often depends on long-term agreements with tenants. HSBC is directly exposed to the sector as a financier and as a data center operator. Investment in the sector has accelerated as companies compete for computing capacity. A growing part of that expansion is expected to rely on borrowing. The borrowing is also adding pressure to bond markets. They are yield-insensitive. Now get your AI Quotient. Take the AIQ test.