WSS: More large cloud and data centre deals to build AI infrastructure personify the state of demand and the acceleration in sector growth
It was a slower week with the US Thanksgiving holiday and we reduced our publishing. But there were still developments of note, particularly in AI infrastructure. Infrastructure contract sizes continue to climb the ladder. Anthropic, developers of the Claude AI model, confirmed plans to invest $50b to build cloud infrastructure and data centre capacity in partnership with Fluidstack. The deal reflects a number of moves made in the last few months involving others such as TeraWulf, Cipher and most importantly, Google, and we have the details. Meanwhile, another big deal involved Meta contracting for $3b worth of cloud infrastructure services from Nebius.
As the month comes to a close, we took a closer look at some of the key developments. With earnings season taking place throughout November, we got a good picture of how the sector is performing. All indications are that things are continuing to pick up pace and this has manifested in revenue growth acceleration. There was healthy performance across the board and AI demand seems to be having a ripple effect across the ecosystem. One of the persistent themes in earnings season has been the imbalance between demand and supply. This is driving up RPO numbers and pushing the hyperscalers to invest in more CapEx outlays. The barrage of major infrastructure deals speaks volumes and momentum continues to build.
We will get back to a regular publishing cadence next week, but before doing that, we wanted to mention the unfortunate passing of a client, partner, mentor and dear friend George Karidis, who was most recently the VP of Metal Operations at Equinix after executive roles at Packet, Virtuozzo, CompuCom and SoftLayer-IBM. George lost a valiant fight with cancer on November 8, but was his witty, sarcastic and entertaining self right to the end.
I met George, a fellow Canadian, back in 2006 when he moved to Dallas from Paris and joined SoftLayer, which was later sold to IBM and became the basis for the IBM Cloud platform. George was our first client and many long conversations over perhaps a few too many drinks helped form the idea that became Structure Research back in 2010-11. George was the best mentor anyone could ask for and helped me develop professionally as he had once been an industry analyst himself at Yankee Group once upon a time. He gave me the confidence and belief that I could branch out on my own and build a dedicated research shop focused on cloud and data centre infrastructure services. Your legacy carries on in everything we do George. You will be sorely missed by all of us and we can never thank you enough for everything you have done. Rest peacefully.
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