Germany's Infineon says AI data centre buildout won't slow

Chip giant Infineon said Tuesday that the rapid buildout of AI data centres would not slow down despite growing resistance in the United States, even as it predicted the backlash would likely spread to other countries.

There has been increased opposition to the environmental and energy costs of the sprawling sites in the United States, with many Democratic winners in the recent midterm elections vowing to put a brake on the projects.

Jochen Hanebeck, chief executive of the German giant that has benefited from making power chips used in the centres, acknowledged in an earnings call the "growing debates about expanding AI infrastructure".

But he said this was a "rather American-centric topic".

"Of course the world over there are concerns voiced by people who live in the direct vicinity of AI data centres," Hanebeck added, but "around the globe there are many regions that are very sparsely populated".

"I believe that the operators of these data centres and the American hyperscalers will find areas that aren't necessarily all located in the United States, perhaps also in other countries where AI data centres can be built," he said.

"I believe the expansion of data centres will diversify on a regional basis. I believe that is a good trend."

Infineon reported Tuesday a 12 percent rise in revenue for its fiscal year to end-September, and forecast sales growth climbing to 20 percent in the current year due to AI data centre demand.

The company does not make AI processors themselves, like those designed by Nvidia, but supplies the chips that help deliver electricity from the grid to the sites.

"AI delivers real value, and its importance will only grow," Hanebeck said, calling the technology a "key driver of our growth and profitability".