WSS: PTC saw various conversations around the state of demand and potential solutions to addressing constraints and imbalances
It was a somewhat slower week as the sector gathered in Hawaii for the annual PTC event. Originally a telecommunications-focused event, PTC has seen increased participation from data centre operators and the supporting ecosystem. There is a feeling that this demographic has taken over the event and outnumbered the legacy telco side. That may well be the case if this year was any indication. PTC is primarily a networking and business development environment, but it is worth discussing the conversation around the event. A few themes were top of mind for those in attendance. One of them was behind the metre energy solutions. Operators and suppliers alike are contemplating the extent to which behind the metre is viable and how fast it can reach the market and support real use cases. The momentum in this area is a recognition of the reality of resource constraints and the intensity of demand, which does not seem to have relented even as less than optimistic, and even skeptical views, continue to be out there and are trying to make more noise. This was perhaps one of the more surprising twists at PTC. The intense debate over the AI bubble seemed to have been somewhat under the radar as discussion about how to address high levels of demand and a large addressable market dominated the conversation. Maybe it was the start of the year after the holiday break and the brilliant weather that put people in a good mood and left these discussions for another day. We will know in the coming weeks and months.
There was also concerted discussion about the overall hyperscale demand profile and where the neoclouds fit in all this. Is hyperscale demand softening and will there be more pullbacks in 2026? The question was asked, but again, most seemed relatively optimistic and this matches up with the accelerating hyperscale growth we saw in the back half of 2025. Neocloud demand was also top of mind within the context of this overarching discussion about hyperscale demand. The likes of CoreWeave have been driving data centre colocation leasing and operators are keen to get on the gravy train if there is one coming. The neocloud market still seems top-heavy, with various questions around creditworthiness, stability and long-term viability rightfully being asked and engendering caution. But there is real demand out there and deals are being signed. NVIDIA, and now increasingly AMD, is pushing this forward and there are reasons to believe the universe of viable large-load data centre infrastructure customers is going to expand.
There was also a lot of discussion around the pre-development phase of data centre infrastructure development. Many of the operating groups, particularly new entrants, have gravitated to this part of the market. They are focused on aggregating and procuring raw resources and selling to data centre operators or hyperscalers directly, and largely staying away from building or operating data centres. Land and energy is the focus, and that may well be enough for a transaction, with the powered shell being the furthest many of these groups will contemplate. It definitely looks like the new entrants are moving in this direction and it makes sense. Building and operating is difficult, with stiff competition from established providers, and it is also not the biggest pain point. Solving problems has always been at the core of infrastructure services and helping hyperscalers means moving more in this direction.
Another implication of the behind the metre conversation is the idea and hard reality that the end user and data centre is going to where the power is and not the other way around. This is why places like North Dakota have emerged and Applied Digital is looking to repeat that template in a new location that is yet undisclosed, but likely to be in a place like west Texas where the resources are available. Applied Digital is in talks with a third large-load customer and broke around as it looks get the site ready for the customer and shorten time-to-market. Meanwhile, Vantage Data Centers is working hard to get energy for future builds and partnered with Liberty Energy for natural gas solutions that would come behind the metre.
Applied Digital is benefitting from high levels of hyperscale demand and AI development. We have a few data points around the momentum Anthropic and OpenAI are seeing, which is pushing hyperscale cloud consumption, and by extension, data centre infrastructure absorption. Much of the demand, so far, is coming from large end users.
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