Data center rundown: October

30 October 2024

The witching hour is upon us, and the data center industry has been conjuring up some treats (and a few tricks!) this October. As the spooky season casts its spell, I've rounded up the most bewitching headlines from the past month. So, grab a toffee apple (or a piping hot coffee to ward off the chill), settle in, and let's dive into the latest updates from the data center industry - if you dare!

What to expect:

• DigitalBridge acquires Yondr

• Data center costs surge due to power, labor, and capacity challenges

• Equinix enters $15bn joint venture to develop xScale data centers

• Cologix secures $1.5bn for hyperscale expansion

• More DC industry news.

Let’s get into October’s Data Center Rundown.

Yondr acquired by DigitalBridgeDigital

Bridge Group has announced an agreement to acquire Yondr Group through one of its managed investment funds, with the deal expected to close in early 2025. Terms of the agreement have not been disclosed. Yondr will operate as an independent company within DigitalBridge’s portfolio, which includes Vantage, Switch, DataBank, and Scala.

"Yondr’s assets and relationships with leading hyperscale clients align with our vision for digital infrastructure," said Jon Mauck, Senior Managing Director at DigitalBridge. "This acquisition enhances our data center portfolio and strengthens our ability to support hyperscalers, positioning us well to meet the growing demand driven by AI, cloud computing, and digital transformation."

Headquartered in London, Yondr develops, owns, and operates data centers, currently having a contracted capacity of 878 MW, with 58 MW operational, and projects in Virginia, the UK, Malaysia, Japan, Germany, and India. Yondr has over 420 MW committed to hyperscalers, with potential capacity exceeding 1 GW.

Equinix establishes $15bn JV to build xScale data centers in the US

Equinix has launched a $15 billion joint venture with Singapore’s GIC and the Canada Pension Plan to expand its xScale hyperscale data center network in the US.

This initiative aims to support hyperscale providers by creating large-scale, 100MW+ data center campuses that integrate with Equinix's existing International Business Exchange (IBX) facilities.

The JV will fund land acquisition and development, targeting 1.5GW of additional data center capacity, catering to the expanding demands of AI and cloud infrastructure clients.

Google's considers nuclear power deals for data centers

Google is exploring nuclear power options to support its data centers, according to CEO Sundar Pichai. He mentioned that the company is evaluating advanced technologies like small modular reactors (SMRs) as part of its long-term energy strategy.

Pichai first raised the idea of SMRs in recent discussions about Google’s plans to build data centers with 1GW capacity, underscoring a potential shift toward stable, carbon-free power sources to meet its energy-intensive operational needs.

Microsoft invests €4.3bn in AI and cloud computing infrastructure in Italy

Microsoft plans to invest €4.3bn ($4.75bn) to expand its cloud and AI data center infrastructure in Italy, marking its largest investment in the country.

The expansion includes a Northern Italy data center and aims to position Italy as a major data hub for the Mediterranean and North Africa.

Additionally, Microsoft is committed to training over one million Italians in AI and digital skills by 2025, further supporting the region's digital transformation.

DOE: Nuclear energy must triple by 2050 to meet AI, data center demand

A new US Department of Energy report indicates that nuclear capacity must triple – from 100GW to 300GW by 2050 – to meet AI and data centers' expanding power needs.

Rising demand, especially from these sectors, highlights the urgency for clean, reliable power sources, with nuclear energy’s compact, 24/7 output seen as essential.

Clean firm resources like advanced nuclear could help companies, such as Google, cut decarbonization costs by up to 40% compared to wind and solar with storage alone.

The report stresses nuclear energy as a vital complement to renewables, especially for data centers needing reliable 24/7 power.

Nuclear can support variable renewables by filling gaps in supply, which is crucial as retired nuclear capacity has often been replaced by natural gas rather than renewables, reinforcing its unique role in achieving consistent carbon-free power.

Report: Power, labor, and capacity issues drive up data center costs amid AI boom

A recent Turner & Townsend report highlights that the AI data center boom faces challenges from limited power availability and supply chain capacity.

In a survey, 92% of respondents prioritized power availability over location for investments, with 68.4% citing energy consumption and efficiency as top concerns.

Tokyo remains the most expensive market at $14.30 per watt, followed by Singapore at $13.80. The UK is emerging as a key market, especially after classifying data centers as critical infrastructure.

Lisa Duignan data centers sector lead at T&T emphasizes the need to address power supply and labor shortages.

Cologix raises $1.5bn to finance plans for hyperscale growth

Hyperscale and edge data center operator Cologix has secured $1.5bn in debt and equity financing to support its growth initiatives.

This includes a $1bn multi-asset development debt facility and $500m raised from both new and existing investors.

The Stonepeak-owned company stated that the debt facility will provide flexibility for future site additions and capital for development projects. Both financing rounds saw strong investor demand, reflecting confidence in Cologix’s business model and growth potential.

Blackstone's prospective data center pipeline soars to $100bn

Alternative investment management company Blackstone continues to grow its data center portfolio, now valued at $70bn, with an additional $100bn in its prospective pipeline – up from $55bn and $70bn last quarter.

A significant driver of this growth was Blackstone's acquisition of AirTrunk for AU$24bn in September.

"Today, Blackstone is the largest data center provider in the world, with holdings across the US, Europe, India, and Japan," said CEO Stephen Schwarzman during an earnings call. "Our acquisition of AirTrunk, the largest operator in the Asia Pacific region, reflects our unique position to invest in this sector, backed by our expertise and substantial capital."

Schwarzman noted that Blackstone has rapidly scaled this new business area, emphasizing plans to address the industry's growing power needs, which he believes will create substantial investment opportunities.

And that's a wrap on October's data center rundown! I hope you enjoyed this spooky season's mix of treats and tricks from the industry. As the sector continues to evolve, one thing is clear: the demand for data centers is showing no signs of slowing down.

If you're hungry for more industry insights and updates, be sure to head over to our resource center for a treat trove of articles, webinars, and expert analysis.

Don't forget to stay tuned for our next monthly rundown, where we'll be diving into the latest news and updates from the world of data centers.