- Barry Sternlicht warns AI will force job cuts. Tasks handled by teams today can now be done by low-cost AI tools.
- Starwood Capital is investing $20B in data centers. Most are backed by major AI tenants like Amazon, Google, and Microsoft.
- Fifth Wall’s Brendan Wallace raises concerns about scale. He fears AI infrastructure demands could exceed the current US GDP.
- Sternlicht sees Europe as a better bet than the US Wallace, meanwhile, remains optimistic about New York’s long-term value.
AI Will Reshape Jobs—Fast
According to CNBC, Barry Sternlicht, CEO of Starwood Capital Group, believes AI will soon eliminate many jobs. “Jobs of 15 people can be done with a chatbot that costs me $36 a month,” he said. He called this shift “terrifying” but necessary.
Data Centers: AI’s Real Estate Engine
Starwood has committed $20B to data centers. Most of the developments already have leases with hyperscalers like Amazon, Microsoft, and Google. Sternlicht voiced concern about Oracle’s partnerships with AI firms like ChatGPT, which don’t yet generate profit.
Brendan Wallace agreed and said tracking investments across tech firms and infrastructure providers is difficult. He warned that if every data center under construction goes live, supporting them might require more revenue than the entire US GDP can produce.
From High Rates to High Tech
Rising interest rates hurt both real estate and proptech startups. Sternlicht said those increases are now behind us. He expects rates to fall in 2026, especially if a new Fed chair takes over. He blamed current inflation on tariffs, not monetary policy.
Wallace said rate hikes also slowed proptech investment. Real estate companies shifted focus toward decarbonization in recent years. He believes those efforts may ease under a Trump presidency but expects the trend to return later.
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Where They’re Betting Next
Sternlicht said his firm is now focused on Europe. He cited lower inflation, weaker currencies, and favorable conditions compared to the US Wallace said he would bet on New York if he didn’t need short-term returns. He believes its long-term value is underestimated.
Why It Matters
AI is no longer a distant concept. It’s changing how the real estate industry operates. Data centers and automation are transforming investment strategies and workforce needs. Sternlicht and Wallace are already adapting.
What’s Next
Expect more AI integration across real estate. Firms will use it to cut costs and improve efficiency. At the same time, pressure will grow to ensure the tech’s infrastructure doesn’t outpace what the economy can support.
