WSS: AI infrastructure expansions in the UK point to global growth as overflow continues and more multi-MW consumers raise capital
Another busy week for the sector saw more investment and expansion activity in global markets for AI-oriented infrastructure. The much publicized Stargate initiative is gaining more momentum and now moving beyond the maiden project in Abilene, Texas to other parts of the continental US. OpenAI confirmed this past week that five additional Stargate locations in the US are at various stages of being planned and moving along with development. The locations chosen include secondary markets in non-traditional data centre locations and others that are in relatively close proximity, but well outside (several hours drive) primary Internet infrastructure hubs like Dallas.
The Stargate initiative also started to expand more aggressively on a global basis. Details about the Stargate UK initiative were revealed last week as OpenAI looks to build gigawatt-level training centres in the UK in partnership with NVIDIA and data centre colocation operators like Nscale and DataVita. Against the backdrop of a US government state visit, the UK was at the centre of a number of strategic moves around AI infrastructure and market development. CoreWeave is set to invest an additional £1.5b in the UK, while others like Microsoft, BlackRock, Blackstone, Stellium, QTS, Scale AI, Salesforce, X-Energy and Centrica are making various levels of investments and collaborating on projects aimed at building out AI. The US government’s recent visit coincided with £150b of inwards investment, including a £31m US-UK Tech Prosperity Deal. Meanwhile, the Stargate initiative is also pushing into the MEA region. The Stargate UAE project in Abu Dhabi signed G42 for a construction project, with an initial phase of 200MW.
The infrastructure builds are ambitious and being made in anticipation of strong demand and long-term expansion plans. Hyperscalers continue to report demand levels exceeding supply and this is because quite simply, it takes time to build data centres, and raw land and energy resources are hard to get in an increasingly constrained environment. This has led hyperscalers to jump on to other public cloud or neocloud platforms so they can access infrastructure on-demand within a service-based delivery model. This overflowing of capacity demand has been accelerating and in the past week, Meta was reported to be working on a deal with Oracle Cloud for cloud infrastructure capacity in a deal said to be worth in the $20b range.
The rise of AI is creating more off-takers of both public cloud infrastructure and data centre colocation. Names like Groq and Anthropic are driving cloud and colocation consumption and both recently raised significant amounts of capital that will certainly find its way into the infrastructure demand pipeline.
Finally, the week saw more developments coming out of APAC. On the strategic side, Bain Capital sold the China-based data centre assets that operated under the Chindata banner, while Equinix launched a new AI-ready data centre in Chennai, and we also tracked the CapEx outlays of Tencent, which is being driven by investments in its cloud and AI infrastructure services.
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