WSS: Earnings season reveals diversity of infrastructure ecosystem as GPU clouds continue to take off
The sector continues to push forward as the NVIDIA GTC conference was held this past week, providing a window into what is next for GPUs, but just as importantly, how the ecosystem supporting delivery as cloud infrastructure services is forming. We were at the show taking it all in and will have some details and perspective in the coming weeks.
We have reached the tail end of earnings season and in the past week, we took a closer look at the results coming from American Tower’s CoreSite data centre business, cryptocurrency infrastructure provider turned data centre operator Applied Digital, and infrastructure investment platform DigitalBridge. This diverse cross-section of companies sheds light on a number of different dynamics. DigitalBridge shows how the ecosystem is intertwined and growth is happening across the value chain, while Applied Digital, like Core Scientific, is a new entrant to the data centre colocation business, taking assets used in another context and use case – cryptocurrency – and applying it to data centres and hyperscale infrastructure. The results show that the transition for the likes of Applied Digital and Core Scientific is not a straight line and will take time. A business like American Tower’s CoreSite, on the other hand, shows steady and consistent growth that speaks to the stability and scalability of an established data centre operating platform. CoreSite also drives a lot of business through interconnection, and just as the DigitalBridge results emphasized, are a good snapshot into how the ecosystem is highly interdependent and its fates intertwined. Still on the earnings side, we also looked at the results coming from Fastly, which is starting to grow its compute infrastructure business similar to how Akamai and Cloudflare have progressed.
The recent weeks also saw some interesting strategic activity, with transactions in global markets and another example of operating providers engaging in technology acquisition. In the UAE, e& sold a stake in Khazna Data Centers, while in Australia, Partners Group acquired GreenSquareDC. On the technology side, CoreWeave is reported to have paid a hefty sum for Weights & Biases, an AI model development and monitoring technology. The move comes just on the heels of CoreWeave filing its S-1 and is aimed at driving CoreWeave’s goal of differentiating through software innovation.
CoreWeave is the GPU cloud poster boy, but there are plenty of other independent operators in a landscape that is increasingly fragmented. And many of them are building out infrastructure to support growth initiatives. In the past week, we saw two new deployments land in Europe. Nebius Group deployed a GPU cluster with Verne in Iceland and Ori will stand up its first GPU cloud node with Kao Data in the UK. Europe is starting to see more GPU cloud expansion and CoreWeave also selected a Bulk Infrastructure data centre in Norway for its fourth Europe-based cloud infrastructure location.
The sector continues to expand and transform, and we have spent time looking at the shifts in the competitive landscape. The emergence of the master-planned data centre model continues to gain momentum, but this has largely been restricted to markets in the US. But the model is starting to emerge in other regions of the world. We have been tracking a new operating platform called Doma Infrastructure Group that is planning to employ this model in the rapidly emerging market around Bangkok, Thailand. It is likely just the start of more to come across the region.
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