Did you know that there is a massive hyper-scale data centre buildout currently underway in Canada?
Canada currently has 337 data centres in total, including 5 “hyper-scale” data centres (“hyper-scale” is essentially a size term, it means very big). There are development projects underway that will add an additional 96 data centres to the nation’s total.
This is a pretty big development. On the one hand, there is potential for stress on power grids, and maybe pollution, depending on the power source where the data centres are built. On the other hand, the data centres could provide many jobs as well as access to vital AI infrastructure. On a policy level, it’s a mixed picture.
In the meantime, Canada’s data centre buildout will be an undeniable boon to some Canadian companies. In recent articles, I covered two of them: Brookfield Corporation (TSX: BN) and its partner Brookfield Renewable Partners (TSX: BEP.UN). In this article, I will explore another company that could profit from Canada’s data centre buildout – and yes, it’s another Brookfield company!
Source: Getty Images
Brookfield Infrastructure Partners
Brookfield Infrastructure Partners (TSX: BIP.UN) is a Canadian company involved in the AI data centre buildout, not just in Canada but elsewhere. In this company’s case, the opportunity is not as “hyper-scale” as it is in Brookfield Renewable’s case. That company is indeed supplying power to true hyper-scalers (i.e., the American big tech giants). Brookfield Infrastructure appears to be supplying data centres for more modest clientele. However, its strategy certainly has some potential. Among other things, BIP.UN is apparently securing long-term leases of 10 years or longer – that’s a smart move.
Massive investments in data centres
Brookfield Infrastructure Partners has been making massive investments in data centres lately. Some of its projects have included:
- The CSquare Platform, which spans North America and includes property in Toronto.
- Compass Data Centers, which has two data centres each in Toronto and Montreal.
These major data centre projects include several individual data centres across Canada’s major cities, and more locations may be added in the future.
Part of the Brookfield ecosystem
One big advantage that Brookfield Infrastructure Partners has is that it is part of the Brookfield ecosystem. Brookfield, as an entity, is extremely well-connected in the tech world. It is partnering with NVIDIA (NASDAQ: NVDA) to develop the full-stack AI service Radiant. Brookfield Renewable Partners is supplying billions of dollars worth of renewable power per year to Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG). These connections may provide Brookfield Infrastructure Partners with important opportunities down the line.
Foolish takeaway
While Brookfield Infrastructure Partners is not currently exploiting the “hyper-scale” data centre opportunity to the same extent that Brookfield Renewable is, it is involved in AI data centres generally. Through CSquare and Compass Data Centers, it operates multiple data centres across Canada. Through its position in the Brookfield ecosystem, is has the opportunity to take advantage of future projects.
Brookfield Infrastructure Partners has built one of the most valuable collections of hard assets in the world, with cell towers, pipelines, utilities and more in its portfolios. Now, it is adding data centres to the mix. That in itself doesn’t make BIP.UN a great investment, but it’s certainly promising.
