AI is a transformational technology worth investing in – but investors need to be selective when investing in data centres, according to the head of one of the world’s biggest banks.
Speaking with CNBC’s Dan Murphy on Tuesday, HSBC CEO Georges Elhedery called artificial intelligence “a major enabler to re-engineer and reimagine all our businesses, all our activities.”
“It’s going to put a lot of power back in the hands of our colleagues because of the level of productivity it gives, so it’s going to be transformational, and we’re definitely on the road to implementing it,” he said, adding that AI will help “reengineer banks.”
But when it comes to investing in the infrastructure that supports the technology, he suggests taking a holistic approach.
“One has to be selective,” Elhedery said. “You have to look at the quality of the rental agreement. You have to look at the price of the contract. Not all of them have a level of virtuosity that you can strongly support. Some may be more challenging.”
HSBC was ranked as the world’s seventh largest bank and Europe’s largest lender by S&P Global last year, with assets of nearly $3 trillion. The bank – headquartered in London – is the financier and data center operator.
In its 2025 annual report, HSBC said it aims to be “the leading bank for a fast-growing transition ecosystem,” noting that its customer base includes areas including data centers and the AI sector.
Data center campuses house servers that power AI and cloud computing, and have experienced a multi-billion dollar boom in recent years.
Global spending on data centers could reach $7 trillion by 2030, according to McKinsey, with Big Tech increasingly tapping private credit and taking out loans to finance the development of these facilities.
But AI lending is a source of tension in financial markets, as capital costs rise and companies add to huge debt piles as they race to fund AI and build data centers.
Speaking at the GZERO Summit LSEG and Eurasia Group in London earlier this month, Mohamed El-Erian, Allianz’s chief economic advisor and former CEO of PIMCO, highlighted the competition for funding between governments and AI-related companies as a source of pressure on the bond market.
“The government borrows what it lends, plus repays the debt at a higher rate,” he said. “[And] you have hyperscalers who last year raised $200 billion in bond financing, and will probably raise a trillion in bond financing this year. They produce insensitivity. They are spreading insensitivity because they are betting on something that is truly transformational.
Bond yields issued by various major economies are set to hit multi-decade highs in 2026, amid concerns about rising government deficits and rising debt levels, as well as fears of sticky inflation and more hawkish central banks.
JPMorgan Chase estimated earlier this year that $4.1 trillion in AI-related debt will be issued by the end of the decade, as data centers and other companies close to AI will spend on building capacity.