Ross Perot Jr. says AI boom is causing a warehouse shortage

American billionaire Ross Perot Jr. says the artificial intelligence boom is causing a shortage of the largest warehouses in the United States, as companies race to build data centers.

Speaking on Tuesday while taping The David Rubenstein Show at Bloomberg Invest Dallas, the Texas developer said there are only 15 to 20 vacant warehouses of 1 million square feet or more across the country, compared with a more typical 50.

“You’ve got this industrial boom going on in the United States, and we’re running out of warehouses,” Perot said.

In North Texas, where his company Hillwood is based, he said just one building of that size is currently available.

Perot said the shortage is being driven by companies building AI infrastructure, which need huge spaces to store and assemble equipment before installing it in data centers. “The AI supply chain is staggering and it’s like every AI supplier needs a million square feet,” he said.

Market data supports his view. The vacancy rate for top-quality warehouses of 1 million square feet or more fell to 5.4% in the third quarter, down from 9.5% a year earlier, according to real estate firm Jones Lang LaSalle. The construction pipeline for such buildings grew nearly 29% to 317 million square feet.

Hillwood develops the AllianceTexas Data Center Campus near Fort Worth. Perot said his family has been involved in data center development since the 1960s, but the sector drew little public attention until recently. “No one said a word until about six months ago,” he said.

He also defended data centers against growing criticism. Opponents point to their heavy use of electricity and water, as well as noise and air quality concerns, and the issue has become a topic in the US midterm elections.

Perot compared the backlash to early opposition to fracking, saying people “got all wound up” before they understood it. He argued that data centers generate large amounts of tax revenue for cities, and said the industry needs to do a better job of explaining those benefits.

His comments add to a growing debate among billionaires over the AI boom. Hedge fund billionaire Ken Griffin warned last week that AI is “almost certainly” in a bubble, while tech companies continue to pour billions of dollars into new facilities.

Perot is the son of the late Texas billionaire and two-time presidential candidate Ross Perot. He built Hillwood into one of the largest real estate developers in Texas.