Wall Street is pitching data centers as a major real estate bet. The risks are piling up

Aerial view of portion of the 928-acre QTS Fayetteville Data Center complex, in Fayetteville, Georgia, U.S. July 17, 2026.

Elijah Nouvelage | Reuters

Data centers have divided America. The ire of everyday citizens continues to increase against a backdrop of enthusiastic and deep-pocketed Wall Street investors betting artificial intelligence is the economic engine of the future. And as data centers that power the answers for Google's Gemini, Meta's Muse, Anthropic's Claude and OpenAI's ChatGPT spread across the U.S. landscape, the financial firms are attempting to pitch investors on AI infrastructure as part of a real estate allocation that can diversify a portfolio.

For the most part, the funds from alternative investment companies promising investors a piece of the physical infrastructure powering the AI economy remain the province of institutional investors like pension funds. But the trend has to a limited degree also dipped into the retail investor market. Alternative investments giant Blackstone has been at the forefront, creating the Blackstone Digital Infrastructure Trust, a newly formed real estate investment trust, or REIT, that trades on the NYSE, earlier this year.

"We saw this as an opportunity to capture the whole market of stabilized data centers and build a home in the public market where we think it belongs," CEO Nick Pell said in a CNBC "Squawk on the Street" interview in May.

While many new data center projects across the U.S. remain subject to shifts in public and political opinion — and various moratoriums including in the states of New York and Texas — the Blackstone REIT is primarily focusing on data centers in already mature markets such as Northern Virginia and Dallas, where sprawling data centers have had a significant presence that predates the AI boom.

Blackstone declined to provide further comment.

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Performance of the Blackstone Digital Infrastructure Trust since its launch in May 2026.

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