Building data centers for AI is 'pricing for perfection' — if the price-performance curve of AI improves, many data centers will become stranded assets.
Cuban and the host argue that massive capital expenditure on data centers assumes AI demand will grow linearly, but technological breakthroughs could render them obsolete, just as fiber overbuild did in the early 2000s. ✦ AI generated
Mark Cuban · All-In Podcast · 2026-07-21 · original ↗
starts at this moment · 4:24
And we're building these data centers and you know, if there's a price performance curve on AI that minimizes the power requirements, there's going to be a lot of data centers that are going to be turned into pickleball courts. There's going to be breakthroughs in technological breakthroughs as well. Just like we saw fiber back in the day, it was all about putting in fiber. Then it went from 1 GB fiber to 10 to 100 gigabyte and then there wasn't a fiber problem anymore. How is it not going to be the case that we don't get the same price performance improvements on the AI side?
verbatim transcript · starts at 4:24
4:13has to come back in earnings, >> margin dollars. >> Yeah. It has to be profitable. >> Yes. and you just don't know, you know, >> and I'll tell you the other in terms the correlary for um bubbles, right? In this particular bubble, because it's so driven by private capital, there should be a lot more companies going public, not at the SpaceX level for not open AI, not anthropic, but the hundred million
4:35dollar um IPO. >> Yeah. >> Because if AI does what AI knows, we all we we all know what it'll do in terms of disruption. >> Yeah. Then you want to have um some sort of um currency that allows you to buy all those companies like you guys were talking about buying different legal companies. Yeah. Right. Well, if you don't have that currency, the stock is currency, you're going to have to go out
5:01and raise money to do it. And if anything happens, and that money is not cheap, that money is really, really expensive. versus if you go out and you do a hundred million dollar IPO or a $50 million IPO and you can do a secondary or whatever as many times as you need if you're performing. But the minute that company that you're competing with that is a legacy business can't keep up or
5:21there's some other um company that has domain expertise that you need or data that you need like you guys were talking about. >> Yeah. >> You want to be in a position to buy them. >> Yes, that is forward thinking. Yeah. No one is forward thinking like that at all. And I'm like trying to tell my um my portfolio companies, go public, motheruckers. Go public. They just don't
5:40think that's the right thing to do. >> Well, and M&A is, you know, not to make this political, but you know, when you're an entrepreneur, you have to play the game on the field. M&A was off the table. Lena Khan had a certain perspective, which was we have to be like precogs in Minority Report. We have to predict who's going to be a monopoly in the future and stop them. Now, it's
6:02like, okay, consideration with to compete with China and everything else that's going on globally. >> Four years of no acquisitions. I mean the people I talked to who are in corporate development were like we we've been told to stand down >> because it's not where we are but even so right it's you know with mergers and acquisitions at that scale fine but if AI does what we know it will do the