Data Centres: Beyond Hyperscalers

Stifel IRIS is pleased to release our latest white paper, “Data Centres: Beyond Hyperscalers – Thriving in the Shadow of Cloud and AI Giants”, which explores how new specialists are carving out moats in a data centre market dominated by AI technology giants.

What this paper covers:

While the generative AI boom appears to concentrate market power, it is also creating significant opportunities for a new ecosystem of specialist data centre firms. Our report provides a strategic framework for understanding this shift and capturing value.

The generative AI boom is fuelling an unprecedented surge in data centre capacity, with global capital expenditure projected to nearly quadruple between 2023 and 2026. This investment is remarkably concentrated, with five hyperscalers driving an estimated 60% of spending: Microsoft, AWS, Google, Meta, and Oracle.

We analyse how specialists can strategically bypass the tech giants, using five proven bypass strategies ranging from low-cost plays to focusing on power access. The paper also identifies emerging AI-driven market openings, such as the rise of neoclouds and the need for specialised HPC infrastructure.

With a deep dive into the European landscape, we highlight the hidden champions that are successfully using local market knowledge to compete, proving that value can be created in the shadow of the industry’s behemoths.

Written by Antoine Lebourgeois.