The data center industry is facing financial challenges as rising interest rates and heavy debt loads impact operators. Internap Holding recently went bankrupt and sold off its data centers to focus on cloud services, while Cyxtera Technologies is potentially heading towards bankruptcy if talks with lenders don't succeed. Famed short seller Jim Chanos has been bearish on the sector, predicting that big tech companies will build their own data centers instead of renting from industry stalwarts. Data centers are expensive to build and maintain, and rising rates and less favorable equity markets are problematic for operators. The sector's fortunes are closely tied to fast-growing tech giants, which are cutting jobs and signaling reduced demand for computing-heavy services. While the distress is currently limited to smaller players, larger companies like Digital Realty Trust have seen a decline in their shares and face a heavy debt burden. The article also touches on other financial news, such as the collapse of First Republic Bank, Lordstown Motors facing bankruptcy, and various legal and bankruptcy proceedings in different industries.
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