Data Center Frontier begins our podcast interview by talking with CyrusOne CEO Eric Schwartz about the company’s recently announced $12 billion in funding, culminating in a new $8 billion warehouse facility in the U.S. to support growth driven by demand from hyperscalers and AI technologies.
During the discussion, Schwartz mentioned CyrusOne’s strong growth trajectory and expansion plans in Europe and Japan, while emphasizing the company’s principles of earning customer trust and committing to operational excellence.
We also get an update on the progress of the company’s Intelliscale offering for customized AI data centers.
In addition, the presentation will cover CyrusOne’s 2024 Sustainability Report, focusing on the company’s efforts towards carbon neutrality, investments in renewable energy, and the industry-wide commitment to reducing its carbon footprint.
Here is a timeline of the podcast’s key moments:
0:41 – The interview begins by highlighting the importance of the total financing of approximately $12 billion recently announced by CyrusOne.
Regarding securing an $8 billion storage facility for future growth of U.S. projects, Schwartz notes:
“We at CyrusOne have been very active in the capital markets. In part, this is due to the growing base of assets we have deployed with customers and securing long-term financing for them. We recently announced a very large warehouse facility here in the US to fund our future growth projects that are just beginning construction or are already under construction. The important thing about the warehouse facility is its size: nearly $8 billion is a significant amount of capital, but really necessary and appropriate for the volume of development we are currently undertaking and planning for the coming months.”
3:34 – DCF notes that the AI boom has triggered a tidal wave of investment in data centers and seeks views on whether this level of investment is sustainable, given comments such as those from the Goldman Sachs analyst that somewhat dampen expectations around AI.
4:42 – In his answer, Schwartz says:
“I expect the volume of capital investment to continue, but it is driven by end-customer demand, and end-customer demand is tied to the development and deployment of AI in many cases. I think we are still at the beginning of adopting and using AI technology in a whole range of business applications, and I think the critical element is that investment follows demand, and our direct demand is coming from hyperscalers and enterprises that are deploying AI. Also, the recent earnings reports from the various hyperscalers showed continued strong growth in the cloud space.”
7:12 – DCF requests an update on the progress of CyrusOne’s Intelliscale data center platform, which can support rack densities up to 300 kW, in North American deployments.
Schwartz reports:
“I’m very encouraged and excited about the progress we’re making at Intelliscale. Our first Intelliscale projects are under construction right now, and we’re planning to have more coming up here soon. They’re spread out across the U.S., in the major markets where CyrusOne is present. I think that similar to cloud infrastructure being distributed to different parts of the country, it’s the same with artificial intelligence, depending on the constraints we face in terms of access to electricity. But we’re making progress on that in different locations across the U.S.”
CyrusOne CEO added:
“Customer response to Intelliscale has been very positive, particularly in terms of the value it brings to customers. They see a pre-built and pre-agreed scheme and design concept that we can build and deliver in a relatively short time, and that is flexible enough to deal with different rack densities, with a specific combination of liquid cooling and air cooling, as not all equipment is liquid cooled out of the box. Intelliscale also includes a built-in operational methodology and scheme for dealing with these higher densities, so the processes and know-how to run such a site are taken into account, as well as the design and technical specifications.”
11:01 – Schwartz outlines CyrusOne’s strong growth trajectory driven by AI, cloud and partnerships, mentioning new leadership positions and expansion opportunities in Europe and Japan, while emphasizing the importance of customer trust and operational excellence.
14:28 – DCF introduces the theme of CyrusOne’s 2024 Sustainability Report. Schwartz discusses the company’s significant investment in producing the report and highlights its progress toward carbon neutrality and efforts to reduce water use.
17:39 – The conversation revolves around the recent surge in nuclear and hydrogen energy development for data centers. Schwartz provides insights into investing in renewable energy, exploring alternative energy sources, and the importance of integrating data centers into the power grid.
18:24 – Schwartz admits:
“I’m personally very interested and optimistic about the progress that’s being made… but at the same time, I would say my realist filter says it’s probably going to be years before we can deploy small modular reactors for nuclear power at a commercial scale. And I know there are pilot projects with hydrogen, but again, that’s still in the early stages, and it’s going to be years, I think, before we see things at scale here in the U.S. and, frankly, in Europe as well. But it’s necessary to continue to invest in the technologies and test them, develop the learning curve to make them commercially viable and adaptable, and I’m generally an optimist. I think it just takes a certain amount of patience to estimate how long it’s going to take to see it being widely deployed in meaningful circumstances.”
24:50 – Schwartz reiterates the importance of the data center industry focusing on reducing its carbon footprint, with a focus on collaborating with experts and providing financial incentives to find efficient solutions.
