Contrarian Takes with Parametrix
The AI Buildout Runs on Uptime. Someone Has to Insure It.
More than $700 billion went into data centers this year, up 77%. Ask most people what’s slowing the buildout and they’ll say power. Jonathan Hatzor, co-founder and CEO of Parametrix, has a different answer: capital.
Estimates for what the AI infrastructure buildout needs run from $2 trillion to $7 trillion. Nobody can say yet who will put up that money. Jonathan’s argument is that most of it will stay on the sidelines until the risk is insurable.
A data center sells a promise
A data center doesn’t sell space. It sells uptime, and every tenant contract puts a price on breaking that promise. Jonathan walked us through a typical hyperscale lease. A few seconds of downtime can cost 10% of the monthly rent. Drop below 99.9% availability, roughly 40 minutes in a month, and the penalty can reach two months of rent. With costs still running, he estimates that equals about six months of cash flow. That’s enough to push the debt service coverage ratio below one, the point where lenders start talking about liquidation.
Repeated outages are worse. Three short incidents in a year can give the tenant the right to terminate. For pension funds and insurers asked to put billions into a single asset, a termination right is a deal-breaker.
The mortgage insurance playbook
Jonathan compares Parametrix to mortgage insurance. By his figures, it unlocks about 35% of the mortgage market, or roughly $5 trillion of lending a year, because it makes borrowers creditworthy. Downtime insurance does the same for data centers: it turns an unpredictable risk into one that lenders can price and finance.
Why Parametrix can underwrite it
Jonathan is candid about the timing: “We got lucky.” Parametrix started with cloud downtime insurance. To price that product, it spent six years monitoring the performance and availability of the hyperscaler networks at Amazon, Google and Microsoft. When the data center boom arrived, Parametrix already held a detailed record of how this risk behaves.
The size of the gap is clear from outages that already happened. After the CrowdStrike outage, Parametrix estimated the cost to the Fortune 500 at $5.4 billion, and only 10–20% of that was insured.
Where it’s going
Parametrix has gone from insuring data centers in the single digits in 2025 to hundreds so far in 2026. Its clients include data center operators, neoclouds and AI labs.
If you can’t insure the promise, you can’t finance the building.
