WSS: More cloud inferencing infrastructure momentum as geopolitics continues to shape landscape
The sector continues to see the frontier labs drive cloud infrastructure leasing. Just this past week, Akamai signed a cloud infrastructure deal with Antrhopic that has a total contract value of in excess of $11b over a seven-year term. There is upside for this deal to reach nearly $20b in TCV. What is interesting is that this deal is for CPU-based cloud infrastructure and inferencing, and this speaks to the widening scope of AI infrastructure requirements. Akamai is already incurring significant amounts of CapEx and expects to lease up to around 100MW of data centre colocation capacity to support the agreement. The frontier labs continue to use cloud infrastructure as a way to procure capacity and the platforms like Akamai, built on top of a global footprint and network built for content delivery and edge services, are in a unique position to serve this demand. For Akamai, the procurement of data centre capacity should not encounter the same kind of challenges required when building out large-scale training installations.
Nscale has also signed a large-scale contract with Anthropic and has filed for an IPO. The filing revealed a number of useful data points and we have the details. Of note were the data centre footprint metrics and signed contract value. Nscale currently has a significant pipeline and 137MW of live capacity, while the TCV is has brought online is already at $2.6b. The TCV contracted is reported to be worth over $100b. Nscale’s filing also included details about its customer base, which is understood to include ByteDance. Nscale and the various crypto to colocation providers are a good benchmark for what is coming. These providers are signing significant deals, with many on a take-or-pay basis, and backstopped, and this is a prelude to a wave of execution that is on the horizon.
Geopolitics continues to shape activity in EMEA and APAC. Chinese hyperscalers are looking to expand where geopolitics is less of a factor and Alibaba Cloud is pursuing this aggressively on a global basis. It has taken its cloud infrastructure platform to LatAm, MEA and Europe, and the latter has been more of a focus in recent months. There are now plans for cloud infrastructure developments in Türkiye, Finland and the Netherlands, and this follows a new cloud region in France brought online just a few months back. Meanwhile, in the MEA region, Microsoft continues to invest and build out its footprint in the Gulf region even as armed conflict causes instability and is complicating supply chains and resources. Microsoft recently committed $10b to build-outs in a number of Gulf countries.
Finally, at the end of every month we review some of the most noteworthy trends. In the past month, we continue to see how the neocloud landscape is changing as demand continues to rise and cloud infrastructure service delivery becomes increasingly strategic as a go-to-market strategy. The spin-off effect for the sector is hard to miss. Pricing integrity for GPU-based compute infrastructure is steady and leasing of colocation is showing no signs of slowing down. And big picture trends continue to benefit from the tailwinds, with more capital raising and new company formation.
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