1Q24 IB: Executive Summary
The stabilization emerging in the latter half of 2H23 carried over into the new year. The overall trajectory of the sector continued to show forward progress in 1Q24 and there are already signs that things are starting to accelerate. Macroeconomic conditions are shifting and a stretch of very conservative behaviour over the last few years is giving way to something that more closely resembles normal. But we are not going back to the way things were. There is a new normal forming. AI demand is picking up pace and shaping the competitive landscape and putting pressure on the supply of infrastructure building blocks required to make Internet infrastructure happen. AI has juiced demand for data centre colocation, but simultaneously brought into sharper focus the challenges that the sector face, and the long-term outlook that is required to execute against this rapidly changing environment. While 2023 was in many ways a transitional year for the sector, 2024 promises to reflect the beginning of a new phase. AI follows and is a natural extension of hyperscale cloud, but changes the paradigm drastically, while accelerating expectations around timelines and overall trajectory. This report takes a close look at the noteworthy trends and developments from the recent 1Q24 period. A more detailed look at the M&A landscape, APAC region and hyperscale cloud sectors is available to clients in separate quarterly reports.
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