00:00First, explain to us the details of your acquisition, how you got into it, and what you expect out of
00:06it.
00:07Well, Matt, we started in a joint venture with Arclight about a year ago with a singular purpose around building
00:13dedicated power to AI infrastructure.
00:16Going, you know, behind the meter to find solutions for our customers that didn't have to rely on the grid.
00:23As you know, we've got a major problem in terms of grid availability, capacity against what our customers want.
00:29And so when we entered into that joint venture, which was a large strategy, a $5 billion strategy to build
00:35grid independent power,
00:37what we found in Arclight was somebody that shared, you know, our sort of strong desire to build and be
00:43an industrial builder of infrastructure.
00:46And so after a couple of months into the joint venture, I looked at the founder and CEO, Dan Reber,
00:52and said, this is going really well.
00:53And he said, yeah, it's going really well. We should just merge. We should figure out how to do this
00:58together.
00:59And we did. And so we announced that transaction. And if you think about what's on investors' minds today, Matt,
01:04it's really about building power and building compute.
01:08And don't take it from Dan Rebers and myself. Take it from Jensen himself last week in Taiwan,
01:13who said the path to tokenization goes through power.
01:16And ultimately, you've got to build compute, and you've got to have that connected to a lot of dark, dense
01:20fiber.
01:21And that ability to deliver the ecosystem is now on display at DigitalBridge with the addition of Arclight and Dan's
01:27amazing team.
01:28Mark, you have built really a huge portfolio now of data center assets.
01:34And I've noticed at a lot of your campuses, you have individualized solutions.
01:38You've got a microgrid at one, right? You've got 100 percent hydropower at another.
01:43Does that power equation have to be in place before you'll invest?
01:47Do you pick spots purposely to have their independent sources of power?
01:54Well, the good news, Matt, is, you know, we've known each other a long time.
01:57We started about over 10 years ago building data center campuses.
02:01This isn't a new thematic for DigitalBridge.
02:03And today, our global total compute availability is about 7.7 gigawatts that's turned on.
02:09And we have another 23 gigawatts behind that, Matt, that is connected and ready for service.
02:14So it's a global leading portfolio of 32 gigawatts.
02:18Nobody has that available power at its discretion to light up for customers.
02:23And it puts us in a really unique position when we sit with customers.
02:26We have 11 different portfolio companies around the world.
02:29It's totally focused on delivering for customers.
02:32And this power bank advantage we have is a strong one.
02:36But also, as you said, we've got to keep building.
02:38We've got to keep building grid-independent solutions.
02:40And at the same time, Matt, we've got to use those to put power back into baseload.
02:44We've got to put power back into the U.S. grid.
02:47That's a critical obligation that every data center owner has today.
02:50What kind of margins are you making on these acquisitions?
02:55You know, there's a lot of concern today around the Oracle earnings
02:58because they're spending more than investors had expected.
03:03How much are you making back on every dollar that you put in?
03:07Look, we don't get into specific cash-on-cash returns, Matt.
03:10But, you know, what we are targeting on a levered basis is mid-to-high-teens returns across our strategies
03:16today.
03:17And Arclight has a similar philosophy, which is, you know, navigating to those high-teens returns.
03:23And what I can share with you is that when we bring the compute and we bring the power together,
03:28the returns go up.
03:29And so that ability to deliver a dedicated power solution for a customer
03:33and at the same time provide that massive amounts of dark fiber connectivity,
03:37that low-latency compute solutions that we bring with all of our fiber companies,
03:41it enables us to price those rents at a place that are really attractive
03:46and, most importantly, allows us to show up on time for the customer.
03:49I can't tell you, Matt, how important it is today to show up for customers and to be on time.
03:53That's really critical.
03:55So back in December, you announced, I guess, a sale to SoftBank
04:02or they made an acquisition of Digital Bridge Assets.
04:05How important does being in that portfolio or how much does that help you deliver that on-time accountability?
04:15Well, look, we're super excited about partnering with SoftBank and MASA's ecosystem.
04:19It's really an interesting combination.
04:21And then you bring into that perimeter Arclight and all the power they're delivering,
04:25you can really begin to see kind of the roadmap of where we're going into the future.
04:29And being tethered to that organization is really fascinating.
04:33I mean, the things that they're doing are really interesting across AI.
04:38And the exposure we get to some of their great CEOs is amazing.
04:42And MASA is amazing himself.
04:43But we're really excited about the ability to deliver on an ecosystem.
04:47I think you're going to continue to hear me say that,
04:49that the uniqueness of power plus compute and plus the stack where you're delivering the actual hardware
04:56is really about the future, Matt.
04:58And the future is AI factories.
04:59I mean, we've been saying it now for a couple of years now around building AI factories and delivering those
05:05solutions.
05:05And you heard that, obviously, on display last week with Jensen in Taiwan.
05:09The future is the ability to deliver the full stack.
05:13And it's not just about delivering infrastructure and power,
05:16but it's also the ability to light up the compute at the same time.
05:19And so that's the direction of travel.
05:22And SoftBank gets that better than anybody.
05:24And building super artificial intelligence and looking around corners and heading towards the future is what we're up to today.
05:30So the take private of DigitalBridge is really a fantastic step in our evolution.
05:35It really freezes up and enables us to do some things that allow us to go back to our roots
05:40a little bit.
05:40And the founders here at DigitalBridge remain intact.
05:43We're a big shareholder and a partner with SoftBank and that take private.
05:47And so we're excited.
05:48The future is looking really strong for us.
05:50I mean, the demand obviously continues to look convex, right?
05:56But I wonder what you think about putting orbital data centers in space.
06:02I mean, how does that affect your land-based business?
06:05It doesn't.
06:07It's a nice science project.
06:09You know, putting compute into space has a host of challenges.
06:13And we look forward to seeing how that plays out.
06:16And look, at the end of the day, the capital that we price, Matt, is very different than the capital
06:20that Elon prices.
06:22And he's a great risk taker.
06:24He's a great entrepreneur.
06:25And if anyone can put compute into space, it's him.
06:27God bless him.
06:28We don't have that delivery mechanism.
06:30We stay with our feet on the ground.
06:32And what I mean by that is the commitments that we've made to our limited partners and the data centers
06:37that we build are tethered to 15- and 17-year investment-grade contracts.
06:42And our ability to access capital has been unprecedented this year.
06:46We've been able to access close to almost $40 billion of debt capital across our ecosystem.
06:50And ultimately, my job is to stay here on Earth and continue to deliver for customers, Matt.
06:55I'll keep my eye towards the stars.
06:57Elon's a great customer.
06:58He's someone we consider a big friend.
07:01And we'll watch with careful eyes on how people put compute into space.
07:05Look, at the end of the day, if one of our servers goes down, our response time is immediate.
07:09It's on the ground.
07:10It's a technician in the data center.
07:12And the great thing about owning companies like Switch that have 100% uptime, we've never had one minute of
07:19interruption at Switch, one of our great portfolio companies.
07:22The challenges of putting compute into space, let's put aside for a second, Matt, latency and the ability to communicate
07:29between Earth-based applications and AI industrial use cases.
07:33What goes wrong if a server goes down, you know, up in space?
07:36So a lot of questions to be answered about that.
07:39Not the first time we've heard people wanting to put compute into space or compute underwater.
07:43That's another one of my favorite ones.
07:45Again, my job, keep my feet on the ground, stay here, deliver for customers, and deliver for LPs.
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