Power & Sites · United States

Nvidia wants to repurpose over 130 old telco buildings as tiny data centers, report claims

Credited to Tom's Hardware · tomshardware.com · 22h ago

Internet and telecommunications provider Brightspeed is reportedly in talks with Nvidia to convert several of its buildings into tiny data centers. According to The Information, Nvidia pitched the idea to Apollo Global Management executives, the parent company of Brightspeed, who then asked it to submit written plans to the internet provider. Nvidia complied and has now requested additional information, data, and site visits to some of Brightspeed’s existing infrastructure.

The data center cooling state of play The custom AI ASIC state of play America’s AI chip rules keep changing — and the rest of the world is paying the price GTC 2026: Ian Buck press Q&A transcript — VP of Hyperscale and HPC speaks out on shelving CPX and shipping LPU decode this year Demand for data center CPUs has surged, and AI agents are responsible

The telecommunications company has around 130 buildings located around the country, many of which are already built to handle data and voice traffic and have the required power infrastructure to run Nvidia servers. Sources say that the AI tech giant estimates that these sites could collectively deliver around 1 gigawatt of compute capacity, which could accommodate more than 2,200 Supermicro Vera Rubin NVL72 racks containing 72 Rubin GPUs and 36 Vera CPUs each. Although these sites already can power these GPUs, it’s still not a plug-and-play solution, as Nvidia would still need to install cooling systems and other supporting architecture. These would still require permits and approval from the local government, but they would likely face less red tape and opposition compared to building a data center from the ground up.

Apollo Global Management has already made significant bets in AI hardware, with the asset management company involved in a $40 billion deal with SpaceX that would give it around 360,000 Vera Rubin GPUs across 5,000 NVL72 racks. While it’s currently unclear who will own the AI chips installed in Brightspeed facilities, the proposal could potentially help Apollo find a place for the Nvidia chips it ordered to get them up and running as soon as possible. This is a much better solution compared to waiting for years to get a data center approved, all while facing resistance from the community even after getting the go-ahead from the local government.

Having multiple small data centers like this is also a setup that OpenAI and Anthropic have been considering, especially as larger facilities are facing delays and backlash from the communities that they’re in. While having a large, homogeneous cluster built in one location is preferable for training, Nvidia representatives have described these smaller sites working together as an “inference network” to help run existing AI models. This is especially important as AI agents, which use five to ten times more tokens than humans, become more popular.

The move to use existing facilities instead of building new ones from scratch has received renewed attention, especially after Americans overwhelmingly voted against data centers during the midterm elections. While the more than 300 data center bans enacted across the U.S. have only delayed three existing projects, it’s feared that the bans and moratoriums would make it that much harder to start new data center developments and make it difficult for AI companies to secure the compute capacity needed to power their AI models in the future.

Power & SitesUnited States

Tech, Media & Telecom Roundup: Market Talk

Credited to Barron's$ · wsj.com12h ago

Useful

Find insight on Quebecor, AI data centers, CoreWeave and more in the latest Market Talks covering Technology, Media and Telecom.

View the article · $Barron's

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Power & Sites · United States

Microsoft plans to use fewer neoclouds as AI buildout shows signs of strain

Credited to CNBC · cnbc.com · 16h ago

Microsoft is shrinking its roster of neocloud partners as it focuses on work with a few key suppliers and builds out its own data centers, according to people familiar with the matter.

The software giant's plans pose another potential challenge for a corner of the artificial intelligence market that's showing signs of strain due to rising borrowing costs, hefty debt loads and concerns about whether the buildout will slow down.

Microsoft has forged relationships in recent years with a number of neoclouds, including CoreWeave, Nebius, Chronoscale, IREN, Lambda and Nscale, as well as with Oracle, which is pouring money into building out AI infrastructure.

Microsoft is now in the evaluation stage and hasn't decided which neoclouds it will stop using, said two sources, who asked not to be named because the talks are confidential. One of the people said Microsoft wants to prioritize its own data center footprint. Bloomberg reported on the plans earlier. Two people said that Microsoft opted not to renew a deal with Oracle.

A Microsoft spokesperson said in an emailed statement that its infrastructure strategy is "built on flexibility and choice."

"We combine Microsoft-owned datacenters, leased facilities and strategic partnerships with third-party providers to deliver the capacity our customers need, where and when they need it," the spokesperson said. "We regularly review these investments against customer demand. That includes tracking delivery and adjusting plans as circumstances change."

The neoclouds have been a turbulent trade on Wall Street in recent weeks as rising interest rates added to fears that many companies have become overly reliant on debt in rushing to build capacity. Shares of CoreWeave, Nebius and IREN are all down by roughly half over the past month even after rallying on Friday.

A recent industry review counted 323 neoclouds, and experts have predicted that many of them won't survive.

In its earnings report on Thursday, IREN said it handed over data center capacity to Microsoft in August, but Microsoft requested a networking equipment upgrade that will result in the infrastructure coming online in January or February instead of this year.

Microsoft finance chief Amy Hood said on the software company's fiscal first-quarter earnings call in October that some cloud contracts involving graphics processing units were delayed until the first half of 2027, affecting Azure cloud growth. Microsoft reported $45.2 billion worth of capital expenditures and finance leases during the latest quarter, and said capex spending will accelerate in the second half of the fiscal year.

Capital markets 'more selective'

CoreWeave and Nebius are both scheduled to report quarterly results next week. IREN shares popped 16% on Friday after the company said AI revenue more than doubled from the prior quarter to $200 million. IREN co-CEO Daniel Roberts told CNBC that there's a "disconnect between what we're seeing in public market and what we're seeing at the customer level."

However, he acknowledged the challenge that market conditions present.

"Capital markets have become more selective in the last few weeks, and the questions have undoubtedly moved from how big the contract is to whether it can be delivered, financed, and run at a profit," Roberts said on the earnings call.

Microsoft has already slashed its work with U.K.-based neocloud Nscale, walking away from a site that it had intended to use in England. Darren Hardman, Microsoft's CEO for the U.K and Ireland, told CNBC in October that the decision had to do with Nscale's ability to get access to electricity.

The Financial Times reported this week that Microsoft decided against renewing a contract with Nscale in Texas. Nscale filed to go public in mid-September but hasn't updated its prospectus since then. The company said in its IPO filing that it expects Microsoft to be a "significant customer in future periods."

Microsoft's big turn to neoclouds came after the launch of ChatGPT in 2022, which led to a surge in demand for GPUs. In looking elsewhere, Microsoft signed up CoreWeave, which was a privately held startup at the time with roots in cryptocurrency mining. When CoreWeave went public last year, it said 62% of its 2024 revenue came from Microsoft.

At the time of ChatGPT's release, OpenAI only used Azure. Now the company's cloud suppliers also include Amazon, Cerebras, CoreWeave, Google and Oracle.

Microsoft's spokesperson said that its approach to reviewing neocloud investments is "a normal and responsible way to manage large, complex infrastructure projects," and that "the pace of our new agreements reflects what we need today."

—CNBC's Kif Leswing contributed to this report.

WATCH: IREN co-CEO: AI demand remains strong despite investor scrutiny

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