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Inside Data Centre Podcast
Who are the people powering the world’s data centers?
Inside Data Centre Podcast is a podcast about the global data center industry, focused on the careers, companies, and conversations shaping modern digital infrastructure. Hosted by Andy Davis, the podcast features interviews with data center professionals, investors, operators, vendors, and industry leaders from around the world. Each episode explores how people enter the data center sector, how their careers develop, and the challenges facing data centers as demand for cloud, AI, and connectivity continues to accelerate. Covering hyperscale, colocation, operations, sustainability, and skills, Inside Data Centre Podcast is essential listening for anyone working in, or looking to work in, the data center industry.
Inside Data Centre Podcast
Data Centre News & GPU's - Episode 4
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In this episode of the Inside Data Centre Podcast, Andy Davis is joined by Ben Baldieri, Founder of 'The GPU Newsletter. The pair dive into the explosive growth of the Neo cloud market, the widening gap between what's announced and what's actually delivered, and why the shape of data centre demand is shifting fast. from gigawatt training campuses to smaller, inference-focused deployments.
Key Topics:
- Neo cloud revenue hitting $25 billion with 223% year-on-year growth
- The gap between headline announcements and actual project execution
- "Time to gas" replacing "time to power" as the key investor metric
- Financialization of compute creating a maturing new asset class
- Customer churn at hyperscale, who can back 400MW commitments?
- Inference demand driving interest in smaller, urban data centre deployments
- Private equity moving into edge-scale infrastructure at pace
- Why community engagement and public perception still lag behind growth
- The AI education gap, and why employers need to give people time to learn
Tune in for a sharp, honest conversation about where the market actually is versus where the press releases say it is.
The Inside Data Centre Podcast is recorded in partnership with DataX Connect, a specialist data centre recruitment company based in the UK. They operate on a global scale to place passionate individuals at the heart of leading data centre companies.
To learn more about Andy Davis and the rest of the DataX team, click here: DataX Connect
The data centre industry is moving faster than ever, and behind the scenes, some seriously smart people are making it all happen. Welcome to the Inside Data Centre Podcast, where we dive into the stories, insights and innovations driving real change across the industry. From hyperscale campuses to game-changing technologies, we're talking to the people shaping the future of digital infrastructure. Whether you live and breathe data centers or just want to understand what's powering our connected world, you're in the right place. Welcome to the Inside Data Centre Podcast. We're back with another edition of our monthly, that is not monthly, Data Centre News and GPUs. Afternoon, Ben.
SPEAKER_00How are you doing, Andy? Um, yeah, this is podcast, monthly podcast number three in a 12-month period, so we're we're doing well at the moment.
SPEAKER_01I know. I had to look back to when our last episode went out, and it was August 2025. So I can only apologise to the two or three people that have been sat there waiting for the next monthly edition. But we're back, we are here now, and we will try and do it. Um I'm not even going to commit to monthly anymore. We will try and do another one before the end of the year. Time being uh time allowed, really. But been a crazy, crazy nine months when you think about it. It's a crazy month, it's a crazy day. OpenAI have just cancelled the delayed the UK development. So you know the what the world is changing every few hours. But let's start with a real simple question. What's what's been happening in your world then, Ben? Where where are you at right now?
SPEAKER_00Obviously, the the biggest thing I think is I mean the biggest thing, pun intended, is scale. Now, right? So if we cast our minds back to the uh the far-flung past of 12 months ago, there were press releases and pretty big announcements. Um, like there was the UK AI summit last April sort of time. There was all of the large announcements that came out of France, it looked like Europe was finally starting to do things, things were starting to move in the right direction. And very little of that has actually come to pass. In Europe at least. But then you look at what's happening in the States now, and how the bottom falling out of the H-100 market is now definitely no longer the case, right? Prices are going back up, everyone is compute constrained, demand is through the roof. I think it really just goes to show how quickly things can change in this market. And honestly, I've given up trying to predict what's gonna happen. I mean, back in December 24, based on what I was seeing at the time, and there were 150 neo clouds offering the same thing, right? Which was H100s or H200s, in what seemed like a commodity market with everyone locked in a race to the bottom. I put out a piece in the tech capital saying that I thought that some of them were gonna go bust last year. I was roundly wrong. I think there were like two that went under. Um, and that's really just a market timing standpoint because if they'd been able to hold on for a couple more months, then they probably would have caught this demand wave as well. And this is where we find ourselves. I mean, the things like OpenClaw, um the improvements in anthropics models with Opus and co-work and dispatch and code and everything now, it's just it's absurd. You know, what I don't really know how to describe it any other way.
SPEAKER_01No, it is crazy times. And I was looking earlier at Synergy had a Synergy Research brought a report out, didn't they? I think it was this week or very, very recently, anyway. Um, when you look at NeoClouds, because it's still such a mystical area of this industry that not a lot of people know a lot about. You kind of you know, myself included, you're trying to learn more about this ever-evolving call it an industry that like we say, changed every 10 minutes, but um revenue exceeded $25 billion for 2025, up 223% year on year in Q4, CAGR of 58%. And there's still people out there that say there's no revenue in this. You know, where's where's the profit coming from? Like, oh the profit's there. It's just not there in the scale that you know people are expecting it, and they're not, you know, and maybe these companies are not shouting about. And and like you say, you've got companies like Core Weav, Crusoe, Core Scientific, Lambda, Nebius, Nscale. It's just like announcement after announcement, whether it's capital raising, new development, you know, it's it's an absolute crazy world. I know your your newsletter obviously really focuses on that area. Mine's more broad in the data center industry, but it's becoming more frequent that there's multiple news stories and significant news stories from these types of organisations. So you're seeing them. I think I would say they're definitely mainstream now. I would 100% say it's it's a mainstream part of the industry now. But like I said, still very unknown, still a bit mystical, still a bit of anti-data center rhetoric around these these types of players. Um, you're still seeing Bitcoin miners come into it, which always creates a bit of uh aminosity, animosity, if I can say it. So yeah, interesting, but it's crazy, that's for sure.
SPEAKER_00Yeah, I mean, I think that the scale of the neo clouds and how they've grown over the course of the past year, because like N scale this time last year, like doing things, but not anything massive at scale, and now they've just bought an American power company that's planning to do an eight gigawatt site, and Cheryl Sandberg's on the board and Nick Clecks. Now, I mean I've got opinions about those things. Cross over that one. Yeah, we'll ignore that. Um but ultimately if you're if you're a startup and you're attracting individuals who are operating at that level, right? Who've gone from either being on the board of one of the most successful companies of the past 20 years, or I mean both of them like have been in that position, right? Coupled with the political influence that comes as well. And you're a startup, you can get those people to buy in enough that they want to be a part of whatever it is you're building. That certainly says something. And it's and that's a year. It's absurd. We've gone from a two billion dollar raise, like exactly. 40 megawatt conversations this time last year to if it's not a gigawatt, I'm not interested. And that's I mean, like the UK's grid capacity is what, circa 35 gig or something like that, all in. So you've brought one 30-5 of the entire capacity of the UK grid. And then they just announced an 8-gigawatt campus, it's absurd. Like the scale is absolutely enormous.
SPEAKER_01I do think we have to touch on the point though, around what's announced and what's delivered, don't we? What's executed? Like, because I had I did I recorded another podcast yesterday, funny enough, which isn't it probably go out after this one, but um around execution and and delivery and kind of the the thought process of organisations, it was a report by BCS Consultancy, um, which is obviously largely UK centric, but um a lot of a lot of what you're seeing is these huge announcements, so let's pick a gigawatt number, it doesn't really matter what it is, but the detail might say first phase is 20 megawatts, and the second phase is 60 megawatts, and you know, it's it's um I think it's important that I know why these organisations, well I don't know, but I have a have my thinking around why these organizations do it. You know, they're trying to attract customers, they're trying to kind of uh attract community engagement, but it's it also can do the opposite. So I think there's it's definitely a conversation around what's announced and can you execute it? And I think when you look at Neo Cloud as well, the commitments they have are unbelievable. So can you, even if you've got everything, all your ducks in a row, you're ready to go, you're gonna build, can you deliver it and execute it in the speed that you have to do it? I think there's so many different angles to that conversation. Um, I'd love to see a graph of what what's um what's announced and what's delivered over the next two, three years. I think it'll be uh it'll be an interesting bar chart.
SPEAKER_00Yeah, no, absolutely. I'm building something like that actually. So once that's live, I'll let you know. Um Yeah, over to you.
SPEAKER_01Over to you.
SPEAKER_00So honestly, I I think the I mean the part of the reason I started the newsletter, right, was because I was tired of waiting through press releases. Um because it's very difficult to sell GPUs to someone if they haven't got any money, but it makes it seem like they have got money, right? You just end up spending all of your time talking to tire kickers. There are plenty of tire kickers in this space. But then you read for a press release, and to your point, right, you'll have this 500 words of game changing this and world changing that and all of this fun stuff, and you get to the end, and then there's one sentence which is like, and we expect to close funding for this project in Q126. It's like, oh, so you haven't actually got any money. So it's it sounds great, and like sometimes it's a cut before the horses thing, whereby it's like, right, if we get the timings of this press release right, investors are prone to FOMO, just like everybody else, right? So if we can get this out and we can make enough of the right noise in the right place with the right people, by the time the dust hustles from this announcement going out, we'll actually probably then have enough cash and enough interest to then be able to deliver on what we've said, right? And everyone knows that there's some of that stuff going on at the moment, right? Given how opaque this market is and the um, shall we say, the issues with governance um that seem to be bubbling to the surface in some ways, like for example, the 50% of data centers which have apparently been cancelled in the US recently, right? There's a lot of noise around them. Why were they cancelled? What were the reasons for those cancellations? Is it because they weren't fundable? Is it because they weren't viable? I don't know, really. Who lost money, right? And where can we find that information?
SPEAKER_01Um there's also an element of were they ever going to happen as well, because yeah, are you basing that on an announcement that actually had no fact no facts behind it? It was simply an amp an announcement. So yeah, I think um, and obviously you're getting delays and you're getting it challenges at the moment, you know, supply chains getting smashed again, like it's um it's hard for everyone to keep up, but yeah, it's I think you just you just one of the great things about this industry is you never really know. Like you can hear different stories from two very well placed people, and you think, well, one of you you can't both be right, but maybe there is a a a middle ground somewhere in that conversation. I um we I don't think many people ever really know what's uh what's happening, and now it has got to the scale of some of these, it has got to the government kind of table, and therefore you're never gonna know unless you're in that conversation.
SPEAKER_00Yeah, and I mean fair play, right? Like everyone building something is hard at the best of times, right? Building something at that scale is incredibly hard because once you start operating at that level, the number of stakeholders that you're having to manage to be able to get something to go, that's a full-time job with the team around you in and of itself. Never mind actually building and running the business, right? You spend so much time working on the business that you're not necessarily able to be down in the detail. So if I mean, again, going from nowhere to an eight gigawatt campus over the period of a couple of years. Fair play. I can do it.
SPEAKER_01No, 100% fair play. And also think like what do you think about the shifting customers as well? Because again, that's become more noisy, hasn't it? Around we have a customer, said customers pulled out, we now have a new customer. And I think you've seen it quite a lot in in the US, particularly where some of the major sites like Abilene and the like have had, you know, we've had a customer and the customer's changed. By the time it's announced in the media that um they've lost a customer, everyone actually knows that they've already got a new customer. So it's not even um it it's sort of it's public knowledge that the new customer secured before they're announcing that the the old customers moved on. But you're definitely seeing a bit of a shift in, I guess, organisations. Um a lot of it's probably geographic around where they do and and where it's best placed for that um capacity at any time. But you are seeing some of these major scale facilities, you know, like I've got a 400 megawatt customer, all of a sudden I haven't. It's it's it's not a small amount of capacity that you've then got to shift. But on your point at the beginning, you know, the demand's so crazy that that's going as quickly as it's um then you end up with the the problem like of like uh uh who is able to sign a contract for 400 megawatts.
SPEAKER_00Of that scale, who's got a balance sheet that is going to be able to support that kind of risk? Who are you going to trust to be able to honour that kind of a commitment? And there's realistically only like six globally who can take on a project of that size. And I mean, everyone wants to work with them, right? It's it's your Microsoft's, it's your Metas, it's your Oracle's to a degree, um, OpenAI, Anthropic. Everyone wants those customers, everyone wants to sign them. But there is it it it's a buyer's market in that regard, right? And equally with customers on that scale, they're not signing your contract, you're signing their contracts, right? There's probably gonna be terminations and convenience clauses in there as well, for example, like you have to sell us the compute at the lowest rate in the market, otherwise we're gonna walk. Because what are you gonna do? Sue us, right? So I think that area of the market's interesting because that's a that's a very, very different game to be playing. But I think the other thing that we're starting to see is the this kind of proliferation of basically neolaps in the middle, right? So 12 months ago, only games in town were the the big model builders. Now we're seeing I mean companies like Base Camp Research in the UK, for example, right, building out foundation models on monumental genomic data sets that they've been building from research trips into the deepest, darkest Amazon for the past 10 years or so, and then all of a sudden they've got the Eden family of models, which are LLMs trained on that genomic data. Right? And that's super interesting. That's a lot more interesting than a chat box. Similar with things like Luminary AI, which is physics AI, and all of these new labs that are going after like a specific set of problems, um using a specific set of data. And I think we're really going to see more of that going forward, especially considering it looks like NVIDIA are kind of getting involved in the open source model game a little bit at the moment, which also makes it seem a little bit like they're competing with their customers, which is interesting. Um, but that also makes sense because both OpenAI and Anthropic are designing their own chips. So why would you not compete with your customers in that regard if they're going to muscle in on your business and you can build some open source models which then lower the barrier to entry for an enterprise deployment who can take one of your open source models off the shelf, fine-tune it on their company data, and it means that you can then sell them hardware so they can deploy on-prem. It's a win for everybody, right? Especially with the conversations around data sovereignty. So again, it's just speed. None of this existed 12 months ago. Right? None of it existed now. Here we are.
SPEAKER_01Yeah, it's crazy. And another point as well, it's kind of the the circle of capital, which is kind of what you you touched on as well. Yeah, the cost of the cost of capital as well, you know, like it's it's very different times economically to what it was 12 months ago, you know, even three months ago, six months ago. Geopolitically, it's a bit of a it's an interesting place at the moment. And I mean I think people are forgetting the cost of capital, you know, like these the the the money behind all of this has to make money. You know, that's that's how money works. It's it's in it for a return. And as capital increases in cost, you're obviously going to see that impact. Either the cost to build these facilities is going to um significantly increase, or you're gonna see capital withdraw. And like, and will it redeploy into areas such as the UA in the Middle East where there's now going to be a big reconstruction, uh, hopefully, if everything settles down there, then you know, will capital redeploy? So there's all these different angles to this industry that are always um kind of shaking things up a little bit.
SPEAKER_00I mean, loads of different moving parts. But I mean, the capital cost conversation is interesting because, on the one hand, with all of the bigger picture geopolitical risks that everyone's having to manage at the moment, coupled with things like the memory supply chain constraints or the HCD or SCD supply chain constraints, which are increasing capex for the clusters for, I don't know, like 40% or something stupid like that. On the other hand, you've got a lot more players who are able to fund GPUs and fund the compute clusters that didn't exist previously. Um, so that that part of the financing ecosystem is now starting to mature. Like you've got the bigger ticket investment banks who are now actually getting involved. You've got financialization companies like Awn, for example, who are looking to create forward markets or are creating forward markets, or Compute Index, um, who are another player about Switzerland or the data community are more focused on financializing. Again, another bit of just part one to go right. So I think on one hand, it seems like the the easy money to throw at just a data center because I'm a landowner who happens to have a decent power connection and I might have a good enough fiber connection to be able to do something. I think that easy money is now gone, right? Um, it seems like investors are doing a lot more due diligence into whether or not site is actually viable. One metric that I've seen or heard being used in the US is no longer time to power. Because what does time to power mean? Like, does that mean that you're going to have a grid connection? Does that mean that you're going to have a transformer? Do you gonna have your substation? Like, what is that? Metric that's being used there more often is time to gas. Um, how quickly can you get connected to whatever gas pipeline? Um and that seems to be the way that the really big stuff is getting going. Like the XAI Memphis clusters, um, for example, with Colossus and Colossus 2, it's all gas turbines, it's all off-grid, it's all behind the wire. And that seems to be the way that things are going. And it's really only going to accelerate as well, because like if you can reduce your time to market, gives your competitors less of an advantage. And then there's also the time value of money as well. If you can get your money working quicker because you're using, I don't know, gas instead of a grid connection, that's gonna put less strain on the grid for one hand, and you're gonna start making a return quicker as well. And like, again, 12 months ago, a few players were talking about behind the meter, behind the wire pricing or micro grids or whatever, right? And it was kind of a bit fringe, and the I mean, you've been in the industry for far longer than I, right? Everyone has kind of done things the same way for a very long period of time, and then all of a sudden there's all of these upsarts, which a year ago were like, this is the way this isn't the way that it works. Those upsarts have been loudly proven correct, and now everyone is having to scramble. So again, this is change. Have an upstart to change.
SPEAKER_01Yeah, exactly. No, I don't, I, I, I, I love it. I love it. The way the industry's been shaken up. It's it was far too stale, far too long. And I think everyone knows that's my opinion. Some people like it, some people don't, but that is my opinion. I think um I was talking to a really cool uh startup in the US. Uh I've got to be careful what I say here, but um, they're uh heavily linked to gas-powered sites. You know, you're they're talking three to five gigawatt demand from a customer for gas-powered sites that have access to these sites, it's all secured and they're ready to go. But that is simply that speed to market, speed to capacity, you know, like whatever you want to call it. They um the power's there, the power's ready to go, it's gas, it's the US has very become very gas-centric, I think, for the scale that that we're talking about in this conversation. I think the uh the grid and the other markets have uh, you know, still are still there, still needed, but when you're talking scale, it's it's not viable. I think um you know, like the microgrid I went to, pure data centres and AVK in um in Dublin. Cool stuff like that's happening in Europe, but it's not uh it's nowhere near the scale of what we're talking about on the stage. Yeah, yeah, like it's only 60 megawatt, Andy. That's a that's a quarter of a haul.
SPEAKER_00Well that again, you get so used to talking about these monumental amounts of power, and you get so used to operating in these massive numbers, but then you take a step back and you think, right, like how much power actually is that? Hundreds of thousands of homes, and it's just one big shed that's doing math and producing heat.
SPEAKER_01Yeah, and I think the you know the industry, and again, when you talk about the way we communicate and a way we work, there's so much good stuff that we could do with this power as well. Like, there's so much good that we can do, community, like getting that power back back into the grid. There's so much we can do. I think um I think the the major scale projects definitely need to do some are doing a really good job at this, but some aren't of communicating the value and the you know what we can return into into the communities as well as be seen as a a take, take take on my earlier point around if you announce a three gigawatt site in a community somewhere, it's probably in Texas or wherever it might be. Um you know what what are you doing for that community? Like you are bringing in just you're bringing it economic benefit, but equally, like you know, as um John and Sandra are living in their house in in Texas, what's the benefit? Benefit to them, you know, what can you do for them? Like the way we communicate needs still needs to be significantly improved. I know like Applied Digital have done a really good job, happy to name someone. They've done a lot of work on the community and inviting them into the site, showing people round, trying to give back. I think that's um equally as important as kind of you know what we're trying to do. It yes, it values us as a society by having access to whatever it is we've got access to, but equally there's got to be some community benefits to the everyday person on the streets.
SPEAKER_00Yeah, absolutely. And I saw a survey recently um of can't remember where it wasn't the US, but people would prefer to have an Amazon distribution warehouse close to them than they would a data center. And I think that kind of tells you everything that you need to know about how the industry is still being perceived at the moment. But I think that because there are so many perceptions and uh everyone has an opinion about what proliferation, wide-scale usage of AI means from an employment standpoint, from a we're now going to have to subscribe to absolutely every everything standpoint, right, through surveillance and all that sort of stuff. That that tends to dominate the conversation in terms of like what's possible, what do people understand to be possible, what are we communicating is possible. There's always this kind of slightly negative lens to it, right? Which can very well maybe true, right? But just from a personal standpoint, playing with these tools over the course of the past few months or so, and really switching from Chat GPT to Claude, if I'm honest, it's like going from riding a horse to driving a car or using going from using Bing to using Google, I think it's probably a testimony.
SPEAKER_01I saw someone with that exact analogy on LinkedIn. I think it was today or yes, or yesterday, it made me laugh.
SPEAKER_00It's it's so so so accurate. But then you realize that, like, okay, what problems am I trying to solve for myself initially? And because of the way that things have generally works forever up until this point, you generally have a pretty good understanding of what the limits of your personal capability are, right? And you'll stop short of that limit so you don't commit some sort of social faux pas or make yourself look bad professionally or something along those lines, right? And you'll stop at that limit and you won't push any further. But with these tools, they are infinitely capable, right? So if you're trying to build a solution to a problem that you're facing, you'll come up to that limit, and then you'll suddenly realize it's incredibly porous because you've got a tool that's going to help you navigate it. So, I mean, I've found that what I'm able to do with these tools, the stuff I'm able to build, the information I'm able to gather, the understanding I've been able to develop with all of this other stuff I've been able to build as well, just in the past couple of months or so, is incredibly different. And I think that if more people understood that the big grey box, which is using a lot of power very, very close to you while kicking out a huge amount of heat, is a massive force multiplier if you spend time playing with these tools. That I think we generally have a better time communicating because it it's still an intangible benefit, it's more of an experiential benefit. And I think the only way that people are really going to understand that is to take some time to play with it. But then it's really difficult sometimes to communicate that depending on what industry you're operating in or what job you're doing. If you're playing with these tools, and these tools are actively undermining your ability to be employed or to make any money, it's you're gonna go in with a perception, and that's a completely fair enough perception, right? So I think bridging that gap, um, and then also trying to make sure that things are a little bit more fair in that we're not just using these massive American models which are incredibly proficient, but then all of that data is going overseas, all of that tax money is going overseas, all of that benefit is going overseas. Um, that's a really, really difficult thing, especially in the UK, because we've got, I mean, what, the um the different AI growth songs? Great idea in principle, right? Where's the demand? The demand exists, but it's all being funneled through claw.a or chat GPT at the moment. There isn't anything really sovereign. The open like and there seems to be this resistance to using the open source models um in the UK at scale because they're Chinese. And we don't like that. Even though it's on primary gaps, and you can completely like it's not going to do anything. You can take it, you can fine-tune it, and you can get rid of all the stuff that you don't want in there, right? People don't want to do that because we don't want to take the risk. So it's difficult, it's a difficult situation.
SPEAKER_01Yeah, I think with the use of AI, I'm I'm quite uh, I guess, opinionated on this one. Like, um, you've got to educate people, haven't you? But you can't. I think I think there's this balance, and I don't want to get political on it. Like, they kind of do and they don't want you to use it. So it's like, what's what's the what's the balance between educating individuals how you use it? You know, like again, like you've gone off on your own with an understand basic understanding of it, you've you you've used Claude, you've developed things with it, like in simple terms, you know, but you've had to do that all on your own. You probably have to go and find how to use it on your own. You've had to do it, unless you go on a course or an and that's obviously economic, you know, challenge some people kind of forward, things like that. You've got to do it all yourself. And I think um that applies all the way down the education spectrum right now. It's all like they're you know, in China they're teaching kids in infant school equivalent how to use these things, whereas my children are nine and twelve, and if it wasn't for me saying, Oh, you know, you could do this or you could do that, they wouldn't have a have the foggiest idea. Well, it's a very British term, they wouldn't have the clue like what to do or how to do it. And then, but then as a as a country, we're like, oh, we're an AI, I know we're not, but we say, Oh, we're an AI, we want to be an AI powerhouse. You're never gonna be an AI powerhouse in anything. Can't even can't even build a blue data center, but but how do you expect to be that if you don't help people learn and understand it? You know, like I I have a bit of a fear. It's even myself, like I said to you, I'm not technical at all. Like, and I'd love to be able to kind of spend the time like you have to develop things and look at how it can benefit. And we use it as a business, and we have people in our business that are this is what they do, but it's you still have to, I still think it's in that period where you've got to learn it all yourself, so you've got to be really into it, haven't you? And you have to have a basic technical understanding really to work out how it works.
SPEAKER_00And and you've got time, time is the biggest thing as well, right? Like it's um I'm fortunate that I I work for myself. I'm it's taken many years to get to a point where I have enough time to be able to step away from trying to keep the lights to play, yeah, to be able to play with stuff, right? Like I'm no longer having to put out fires on a 24 by 7 basis, it's only like a 16 by 7 basis now, which gives me a little bit of extra time. But a lot of people just don't have that opportunity at the moment, um for any number of reasons, right? And I think that that's the that's the difficulty. Um, how do you find ways to to bridge that gap? How do you I mean create enough one time and two cognitive headspace for someone to think, right, I'm gonna sit down and I'm gonna experiment with this stuff and see what I can do with it, as opposed to I don't know, my rent has gone up, or I've got this going on with my job, or I'm not being paid enough, or this bid has come in, there's all of this stuff going on as well. And that's the difficulty, I think. Um and then you if you're someone who's in that position, right, and you see individuals who are doing all of this stuff with it and you don't have the time to do it, that's only gonna breed resentment, right? It's it's never gonna come across in a positive way, and then these massive companies raising huge amounts of money when you're trying to keep food on the table. Again, how do you bridge that gap? That's difficult.
SPEAKER_01Yeah, and I think that's the bigger problem. I think it yeah, I think my I guess I was thinking about that when you're talking. My view, if you're an employer, and we're gonna we're probably going a bit off topic here, but it's worth it's worth a rant. If you're if you're an employer, you've got to allocate time for your employees to learn this stuff. It's only going to benefit you as a business. Like, and I think um don't see it as a threat. 100% do not see it as a threat. Because if you are seeing it as a threat, you your business and your people are probably uh are are under are in big problems, shall we say. Yeah, yeah. You you have a bigger problem not doing it than you do doing it, is probably a good way to put it. Like this is coming, it's there's no doubt about it. And like you say, I think when you get when you get into it and you see real proper business case uses for it, then you start to understand what's coming. Like when I went, like I said to you earlier, when I went to that Microsoft AI event in in London, you see what this stuff can do and what people are doing with it. And it's a very small amount of people using it at the moment because people don't understand, but it's coming, like there's no, there's no doubt about it. It's gonna totally shift the way we work, the way we live, the way we do everything, and having an understanding of it is only going to be advantageous to you across everything, you know, just in your life, really, not just in your in your work. But there you go. Anyway, data centers, let's go back. Yeah.
SPEAKER_00There's probably probably quite an interesting segue into how the demand, how the shape of the market's changing, right? So again, last year, conversations, massive facilities, there's still massive facilities, right? But those massive facilities tend to be what training, right? It's not necessarily interesting from an inference standpoint because you've got all kinds of issues around latency. Like, don't get me wrong, rural northern Norway is a fantastic place because power's nice and cheap, um, and if the connectivity is good enough, but that's not going to be great for real-time inference use cases, so medical, self-driving cars, that sort of thing, right? It's just not going to work. I think inference is now very much a massive demand driver. And we're seeing that, I mean, NVIDIA's groc acquisition is basically a tacit admission that the GPU is no longer the only viable thing, and we're going to integrate the LPUs as well. You've got the likes of Cerebrus, Furiosa, various other novel emerging semiconductors raising huge amounts of money in the UK as well. What does that do to the shape of the data center? So, one thing that I'm seeing, it'd be interesting to get your opinion here, is that suddenly it seems like there's finally some conversation happening around like smaller, decentralized, modular deployments that are either easy. Should we call it edge? I mean, can you really call like one or two megawatts an edge site though?
SPEAKER_01Edge still makes me laugh to this day. I've got podcasts from four or five years ago when people are talking about edge, and I used to ask everybody, what does what does edge mean? What does it mean? No one even knew, yeah, no one knew what it was. But yeah, 100% like inference is yeah, is a driver now. Definitely, I think um you are seeing platform investment, I say private equity, let's say you're seeing PE look at this market now, which again tells you where it's coming. Like I've had a couple of conversations with quite significant PE houses or whatever you want to call them, um, who are investing, you know, let's say hundreds of millions, maybe into the bit billions into these areas, and and there's a reason for that, and that is demand. There's always um there's always a period where people talk about a lot of things, not a lot happens, you can see it coming, but you don't know when. Then when the money starts to look at it, you know it's coming. And yes, definitely um seeing it in Europe and the US 100%. And I think I'm sure I'm not as active in APAC, but I don't doubt it's uh it's no different out there as well. But yeah, it's uh it's definitely a market. I'm not gonna call it edge, you can call it whatever you want, but it is um like you say, smaller data centers in urban areas. Let's call it that capture.
SPEAKER_00It really rolls off the toilet, doesn't it? Yeah, I mean, the um to your point, right? That the money moving in is is an out of dating, and I think that that's gonna be a much more interesting market in Europe and the UK, especially because we don't have big old patches of land with a spare gig lying here and lying there, like in the US. Um, it tends to be smaller pockets, which I don't know, could be in some sort of other distressed asset. Um the power's locked up, the grid connections there, it's too small for a big training data center, but it then becomes much, much more interesting for something inference focused. And if things like three persistence, right? Like it's uh 5,000 tokens per second throughput or something ridiculous like that, and it's a 23 kilowatt system versus like a one megawatt rack. That then becomes much, much more interesting for those um for those edge inference sites. Um and I think don't call them edge. Edge.
SPEAKER_01Oh but I also think um when you think about the energy problem as well, the energy solution and the solution and and uh and the community impact as well, integrating these um smaller urban data centers into um I'm gonna just call it that for the crack now, into uh into developments um where you're building a microgrid and you're building the data center and you're offsetting your heat into the community, all of a sudden you've got like a all-encompassing development. You don't, you're not taking from the grid, you're actually giving back. You're not taking heat, you're actually giving back. You know, like and I think you can do that at that scale, and economically, um, from the conversations I've had, it's viable to the private equity as well. Whereas a at a significant scale, it's very hard to make the power sort of circular economy viable. But that's the challenge.
SPEAKER_00Yeah, definitely. What's the most um interesting project that you've had up recently?
SPEAKER_01At the moment, it's uh let's have a think. There's a lot of new, I think what's happening though, I'd say in the last month has been more. I put a post about it yesterday, more talk about countries like Spain now going. Like they've been talked about for ages, but you know, there's development investment, Microsoft in Zagolfa, Amazon's Aragon, but all of a sudden you're seeing um new developments coming, new platforms being created, power secured. So I think you're going to see more of the newer regions start to come to the fore now, and that's there's there's multiple reasons for that. A lot of it is just um the power pressure in the the areas where they want to be is just impossible now. You've seen it with Finland as well, like Finland, a lot, you know, like Nebias and uh and the like starting to move into these regions. So the geographic spread's definitely um changing, and I mean at the scale, like there's obviously already been developments in these areas, but now you're talking about the scale. Um project-wise, I think a lot of the bigger ones have not really come through yet. I think you've got like your end scale and the like that are out there that you know trying to build a data centre in a ski resort, which is always uh always challenging. But there's a lot of like there's a lot coming that I don't know if I can talk about that are um significant significant scale in quite exciting areas, which I think will be um they'll definitely be challenging from a people perspective, which is why they're talking to me about them. But um, yeah, nothing uh nothing specific springs to mind that's but it's it's everywhere, isn't it? Now like I think um when you start looking at I still think the repurposing of buildings is uh is quite a cool play when companies are doing that, redeveloping on um power stations, power grids, that's kind of where the industry needs to go. I'm talking a lot of um a lot of new monies looking at the industrial sites now, which you've you've seen probably multiple announcements where they're they've got they've acquired X gigawatt of repo, you know, oh X power sites of some description, whether it's uh coal or whatever it might be, they're definitely the that's definitely a play-out of like a significant play. I think you'll see um you'll see much more of that over the next say 12 to 18 months.
SPEAKER_00Yeah, I think my site is right, it's new names starting to appear.
SPEAKER_01Um well I was thinking earlier when we were to when we were talking, sorry to interrupt, but like we say like you know, like you're NScale and Nebus, and these companies have been around for a while, but they've only really come to the fore, let's say 12 to 18 month period approximately, probably less than that when you actually look. Is there going to be any more that come into the scale of them? Because it's always you know, they're they're they're there now, they've got an as an amount of the market, they're obviously ahead from a capital perspective. So, can somebody else get into that area? Look, you used to have these conversations about yeah, the the standard colo data centers. Can anyone break into the digital equinex type world? And people did, um, but can you get into that world because you've got to do it so quickly with so much money? Is is there an opportunity for someone to go jump to the four that we may have heard of, but don't know that well, right?
SPEAKER_00100%, 100%. I mean, so two come to mind, um, both Australian, right? So Fermos is one, just making apps. Firmo is a monumental amount of money, and they're building a day center in Tasmania. And the other one is um Sharon AI. Um, so they went public relatively recently, and from that initial prospectus filing, the initial filings they put in, they went public with 432 GPUs online, like 432 ignore them or hoppers. They've just signed Canva as a customer, yeah. And that's one big marquee customer. Galaxy pretty cool as well. Yep.
SPEAKER_01They announced their results today in my head. That's why, because I read the press release probably about two hours ago. But yeah, so yeah, when you when you say it like that, there are and I guess it's what's known and what's unknown, isn't it? Yeah, we've we've probably heard of these. A lot of people may not have done because geographically they might be in different regions or they're just not eyes on it. But yeah, there are uh when you think about all the money that's being based.
SPEAKER_00Yeah, exactly. But then I think like the the overwhelming majority of enterprises at this stage aren't really doing anything at massive scale just yet, right? Like HSBC are working with Mistral, for example, or you've got Canva signing with Sharon AI, and these are a couple of big names, and then there's probably going to be loads of other companies who are doing stuff on-prem because they're just not going to ever put their data in a cloud environment because of the nature of whatever their business is, but like that's a minority, right? And there are a lot of incredibly valuable um companies out there who are going to want their own infrastructure, right? And this this is really just the beginning. And if you think about I mean, OpenClaw is has been a massive, massive demand driver. The improvement of open source models has also been a massive, massive demand driver, and then you realise that like today is the worst that this stuff is ever going to be. It's only, only going to get better. And I mean, think about how many people pay for access to Chat GPT or Cloud versus the free users, right? And then think about how many people as an overall percentage of the entire population are using this stuff, and this is the demand problem that we're having at the moment, this is the capacity problem that we're having right now. It's insane. So I think there's plenty of space for other players to get in there. Um, and I think we'll probably see some other pretty big names appear relatively soon because it seems like from the conversations I'm having and from other announcements and relationships, right? Kinds of people who are now staff team to get involved, they're different. They're a different class of operator who've watched what's happening, waited to see what mistakes people make, so they don't make those same mistakes when they get involved as well. And there's a lot of that happening at the moment, um, especially in the UK, um, and especially in Europe. So it's gonna be quite an exciting time, I think. I mean, again, this is this is always the same sign-off. It's a very exciting place to be, and things are moving quickly.
SPEAKER_01You mean it's you mean it's not gonna be boring anymore? What are you gonna do? All this spare time I've got. Yeah, no, it's uh it's an amazing place to be, I think. Um on your point before we wrap up, it's that risk-view reward, isn't it? Like you've got different capital has different level of risk. You know, some takes, let's say, five percent risk, some it's in the one percent, some it's under that. And when you start getting into the significant capital, there's a very, very low level of risk, quite rightly. And and when you start to see that coming into the market, it's um it's a very educated investment, isn't it? And I guess that's your point around that there will still be more capital, it'd be different capital, and this capital probably a bit of a less risk averse portfolio. So it's uh be interesting to see what happens. But anyway, we better wrap it up. Otherwise, we talk all day about um ed the education system and the the use of AI in the minor control into politics, though, yeah. I thought we did well to actually uh brought it back getting too opinionated on it. But no, definitely. But if anyone wants to carry on that conversation, please reach out, happy to do so. Um maybe not recorded. Yeah, exactly. Yeah, we're definitely not recording that bit. Um yeah, I'll let I'll let you go. If obviously, as I always say, Ben's GPU newsletter, so Ben can direct you thpu.ai. But if you want to um definitely subscribe, if you want to learn more about his stuff, I'm learning about it. That's why Ben's here, so he can teach us all. But um, yeah, if you want to know anything more about that world, get in touch with Ben. Obviously, if you want to speak to me for whatever reason, you you know I'm quite easy to find these days. And you're everywhere, everywhere and anywhere, always somewhere, as I say. But yeah, yeah. All right, I let it go. Good to catch up. We'll do this again in um not in a month, but uh in a smaller time period than we did the previous one. Yeah. And I'm sure something will have happened by then in this ever boring industry. Thanks everyone. Cheers and that's it for this episode of the Inside Data Centre Podcast. Thanks for tuning in. This show is brought to you by DataX and Data Exec, the recruitment partners powering global talent across the data centre and digital infrastructure world. If you enjoyed today's conversations, don't forget to follow, like, and subscribe. It really helps us grow the podcast community. Stay tuned for more stories, insights, and conversations of the people shaping the future of our industry.