WSS: AI is shaping demand, putting pressure on energy resources, and all this is coalescing towards another wave of sector expansion
We had a slower publishing week, as mentioned, due to our hosting of the infra / STRUCTURE summit in Las Vegas. This was our fifth edition of the summit that debuted in 2018 in Toronto, but our first in Las Vegas. Thanks to everyone that took the time out of their busy schedules to attend, and especially those that participated as sponsors. A special shout-out to Citizens and its lead sponsorship of the show. Citizens has been instrumental in getting this show to Vegas and taking things to the next level. Oh and yes, we have dates for next year: October 15-16, 2025. Save the dates now as we are the first industry event to announce a 2H 2025 date and are planting our flag now.
Before the summit, we published an article about the concern emerging around speculative builds and one of our analyst content contributors, Daniel Golding of Appleby Strategy Group, posed the question: are we entering the age of fake data centres? Dan is trying to make the point, with a healthy dose of caution and skepticism, that there are a number of projects out there and a lot of claims, but the question will be how much of it is real and how much could be, well unreal or fake? It is a legitimate question and there were a number of groups in Las Vegas exploring opportunities with energized assets, adding a new dimension to the competitive landscape. The energy needs of the sector are real, but the big question (and the answer is far from clear) is whether some of these assets are going to translate and if these groups are able to engage in the development, construction and operation of these assets, and go up against seasoned competitors.
There was also plenty of discussion, not surprisingly, around how much interest and investment is pouring into the sector. A recent partnership between BlackRock, GIP, Microsoft and Mubadala is a case in point and speaks to the scale and scope of what the sector is trying to build.
AI is top of mind for everyone and instead of gratuitously slapping AI on session titles as we see at other events, our approach was to weave the topic throughout the important discussions impacting the sector day. For example, a very engaged session of data centre colocation providers zeroed in on how AI is impacting the demand profile and pipeline, capital raising efforts and operations. The demand for AI workloads, intertwined with edge-hyperscale and core-hyperscale demand, has pushed some of the scaled colocation providers to abandon enterprise wholesale opportunities given the upside in AI and lack of inventory left when pursuing this category. The rapid shifts in strategy and approach speak volumes. Other sessions discussed how building for AI is going to impact build strategies, while analysts pitched in and shared opinions on how existing assets are going to be used for these next-generation workloads.
With AI demand surging and the industry set to build for another wave of growth and expansion, energy requirements are going through the roof. We were thrilled to see the energy sector represented like never before as they look to learn more about data centres and potentially collaborate with the industry. Energy was also the focus of several sessions. We looked at on-site generation and alternatives to grid power, while considering the challenges of primary and secondary power. Our head of research Jabez Tan also presented a number of slides that show how much power is going to be needed to support the data centres that end up hosting AI workloads.
This year’s event also saw more strides in the push to get more diversity on the agenda that lines up with where the sector is trending. We are happy to say that we had by far the most women we have ever had speak, and if not for some bad weather in Florida, we would have added to that number and pushed well past 400 on-site attendees.
Finally, for those of you in New York who missed infra / STRUCTURE, we will have hosting a seminar on December 5, 2024 that will summarize many of these topics and themes. We will be opening up registration soon so please stay tuned.
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