#What is I Squared Capital's Recent Investment?
I Squared Capital recently allocated $225 million toward the acquisition of ten data centers, which serves as an initial investment in a much larger strategic plan. The infrastructure investment firm, based in Miami, is set to acquire this portfolio from Cogent Fiber, LLC. Their ambitious goal is to invest up to $1 billion into developing a robust U.S. data center platform that emphasizes AI inference workloads.
This announcement, made on May 26, involves facilities with approximately 53 megawatts of installed power capacity and a total of 259,000 square feet of colocation space across nine significant U.S. markets, including prominent cities like Chicago, Atlanta, Phoenix, and Los Angeles. The expected closing period for this acquisition is in the third quarter of 2026, contingent upon receiving necessary regulatory approvals.
#How Are the Acquired Facilities Designed?
The ten data centers are specifically engineered to accommodate liquid cooling and high-density configurations. These features are vital for supporting the GPU-intensive operations associated with inference workloads. Rather than merely acquiring existing structures, I Squared is committed to investing substantially in upgrading infrastructure, expanding facilities, and pursuing further acquisitions. The initial $225 million acquisition thus represents just a fraction of their future investments.
#Why is Cogent Fiber Divesting These Assets?
On the other side of the acquisition, Cogent Fiber intends to strategically divest from these assets. The proceeds from this sale will help the company reduce its existing debt while allowing a sharper focus on its primary operations. Following the announcement, Cogent's stock experienced a notable rise, gaining approximately 10% in pre-market trading.
#What Are the Implications for Investors?
The $225 million price for the 53 megawatts translates to about $4.2 million per megawatt, a figure that could be a crucial benchmark for future transactions in this sector. The capability for liquid cooling is gaining prominence as a differentiator, especially since traditional air-cooled facilities may struggle to manage the thermal output from modern GPU clusters. Data centers already equipped for liquid cooling, such as those in this portfolio, are commanding premium prices due to the high costs and time associated with retrofitting older centers.
The execution risk, however, is a factor that potential investors should monitor closely. While committing capital is straightforward, successfully upgrading facilities, securing vital power contracts, attracting tenants, and managing the complexities related to high-density AI deployments presents a more complicated challenge. As this platform aims to become operational independently in late 2026 or early 2027, tracking utilization rates and power consumption figures will provide critical insights into its performance.