WSS: More healthy growth trends across infrastructure ecosystem as capital raising and expansion keeps pushing forward
Earnings season is in full swing and in the past week we took a closer look at the results coming from bellwether data centre operators and traditional cloud infrastructure providers. On the data centre side, Digital Realty and Equinix reported healthy bookings that translated into revenue growth, while cloud providers DigitalOcean and Akamai saw growth acceleration driven by high levels of demand for AI-oriented infrastructure. The growth in cloud follows the patterns seen in the hyperscale category as AWS, Microsoft, Google and Oracle all saw material growth acceleration this quarter, while they continue to double down on infrastructure expansion and CapEx is either holding steady or increasing. The demand for AI continues to be aggregated by infrastructure service providers and there is a significant flow-through effect that is benefitting all parts of the ecosystem.
The past week also saw more capital raising activity as neoclouds continue to build out capacity to meet demand in the market. General Compute raised a $100m Series A and will continue with a multi-silicon strategy, while the Blackstone and Google JV that helped form Crux AI is securing loans to buy massive quantities of TPUs. Deployments are also being backed by confirmed customers as BUZZ HPC in Canada secured capital to fund GPU procurement for a deployment that will be taken down by AI firm Cohere. We referenced the flow-through of demand through the ecosystem and nowhere is this more evident than on the data centre side. And in the past week, data centre operators raised significant sums to fund development and expansion projects. MERLIN in Europe secured €3.75b, EdgeCore closed $521in financing, while Nebius got $3.5b in debt and Crusoe procured $700m to finance power equipment it needs to build out data centre infrastructure.
Meanwhile, the mid-term elections take place in the US, and yes, data centres were on the ballot in many ways, both directly and indirectly. We will provide some commentary this coming week, but the reality is that data centres are now a significant political issue and community opposition is a variable that is increasingly going to be a long-term factor within the landscape. Things have been front and centre in the US, but this is quickly becoming a global issue and the differences around the world are going to shape where growth and development are going to push forward or potentially slow, and how the competitive landscape transforms and plays out. It is hard to avoid the fact that the business has rapidly become global, but that also means that the challenges and roadblocks will become global in nature too. And we saw this in Europe during the past week. In Malaysia, there was regulatory activity around critical resources and in Denmark, there is talk about grid queue reform.
Finally, there was strategic activity of note. Nebius acquired a company called Inferize to help add to its inferenc
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