Data Center Frontier Podcast: CyrusOne CEO Eric Schwartz Talks About Financing, Growth and Sustainability

Overview:

CyrusOne CEO Eric Schwartz recently joined Matt Vincent, Editor-in-Chief of Data Center Frontier, for a podcast in which Eric discussed the company's recent financing announcements and growth plans followed by discussions about AI adoption, CyrusOne's Intelliscale data center design for AI, and sustainability.

Interview highlights:

• CyrusOne's recent $12 billion in announced financing, highlighted by a new $8 billion warehouse facility in the U.S. to support growth driven by demand from hyperscalers and AI technologies.
• Strong growth trajectory and expansion plans in Europe and Japan.
• CyrusOne's principles of earning customers' trust and commitment to operational excellence.
• Update on CyrusOne's Intelliscale offering for build-to-suit AI data centers.
• CyrusOne's 2024 sustainability report and the overall industry's commitment to reducing carbon footprints.

Listen to the Podcast:

Read the Transcript Highlights:

0:41 - Data Center Frontier begins the interview by addressing the significance of CyrusOne's recent total announced financing of approximately $12 billion. (See recent press releases: CyrusOne Secures $687.1 Million Commercial Mortgage-Backed Security [CMBS] Financing, July 15, 2024; CyrusOne Secures $9.7 Billion in New Debt Capital to Fund Data Center Growth, July 8, 2024; and CyrusOne Closes on $1.175 Billion ABS Issuance, May 15, 2024.

Eric: "We've been very active at CyrusOne in the capital markets. Part of that is driven by the growing base of assets that we have in operation with customers and securing long-term financing for those. More recently, we announced a very large warehouse facility here in the U.S. to finance our future growth projects that are starting construction or under construction. What's important about the warehouse facility is its scale: Nearly $8 billion is a substantial amount of capital, but really necessary and appropriate to the volumes of development that we have underway and are projecting over the coming months."

3:34 - Data Center Frontier notes how the AI boom has been driving a tidal wave of data center investment and asks Eric if he thinks this level of investment is sustainable.

4:42 - As part of his response, Eric says:

"I do expect the volumes of capital investment to continue, but it's driven by the demand from end customers, and the end customer demand in many cases is tied to the development and deployment of AI. I think we're still early in the adoption and exploitation of AI technology across a whole range of business applications, and I think the critical element is that the investment follows the demand, and our direct demand is from hyperscalers and enterprises who are deploying AI. Also, recent earnings reports from the various hyperscalers showed continued strong growth in cloud as well."

7:12 - Data Center Frontier asks Eric to provide an update on CyrusOne's Intelliscale data center platform, announced in August 2023, which supports rack densities up to 300 kW in North American deployments.

Eric responds:

"I've been very encouraged and pleased with the progress that we're making on Intelliscale. We have our first Intelliscale projects under construction now, and we have more slated to come out of the ground here shortly. They are spread around the United States in the major markets where CyrusOne has presence. I think in much the same way that cloud infrastructure gets distributed in various parts of the country, the same is the case with artificial intelligence, subject to the constraints that we face on getting access to power. But we're making progress on that issue in a number of different locations around the U.S."

"Customer response to Intelliscale has been very positive; in particular, what customers' value is. They see a pre-engineered and pre-coordinated schematic and design scheme that we can construct and deliver in relatively short order, that has the flexibility to deal with varying rack densities, with a certain combination of liquid cooling and air cooling, because not all equipment is going to be liquid cooled straight away. Intelliscale also incorporates an integrated operating methodology and scheme for dealing with these higher densities, so that the processes and the know-how of what it takes to operate a site like this goes into it, as well as just the design and the technical specifications."

11:01 - Eric discusses CyrusOne's strong growth trajectory due to AI, cloud, and partnerships. He mentions new leadership appointments and expansion opportunities in Europe and Japan, while stressing the importance of customer trust and operational excellence.

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