Data Center Investment & Community Impact (with David Westin)

Mark Ganzi, CEO of DigitalBridge, discusses the massive $3 trillion+ investment in AI data centers. He explains the financing structure with 8-12% yields depending on tenant credit quality, the long-term 13-17 year leases, and the emergence of private debt capital. He compares current NIMBYism to the cell tower era of the 1990s, arguing the industry can navigate community concerns. He highlights a critical power supply imbalance: the data center sector leased 13+ GW in 2025 while the US grid only added 5 GW, creating a structural deficit. He discusses the new partnership with SoftBank for 'digital infrastructure 2.0' and the coming wave of data center IPOs and yieldcos.

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Mark Ganzi 9.0

Data Center Investment & Community Impact (with David Westin)

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Massive long-term investment in AI infrastructure ($3T+) with structural power supply deficit suggests sustained demand for AI-related tech stocks. The sector is leasing more capacity than the grid can supply, indicating strong secular growth.

David Westin

Projected investments in data centers have climbed past $3 trillion. That requires a business plan with attractive returns.
Mark Ganzi

Most data center yields are between 8% and 12% on a cash-on-cash return basis. Investment-grade tenants like Amazon get the low end; non-investment grade startups get 11-12% cap rates. Risk is measured in long-durated cash flows with escalators.
David Westin

Do you need to take into account the reaction of the community?
Mark Ganzi

100% is a factor. I started building cell towers in 1994 when nobody wanted one in their backyard. The sector got organized, explained the benefits of mobile communications and emergency services, and made peace with local communities. We need to do the same for data centers.
David Westin

How do you anticipate further growth as well as obsolescence of some technology?
Mark Ganzi

We own the railroad, not the cars. We are GPU and TPU agnostic. We provide the mission-critical real estate and infrastructure, and let our customers decide what servers to buy.
David Westin

Do you have any concern about overbuilding and retrenchment?
Mark Ganzi

In the early 2000s we overbuilt fiber. Now we have the converse effect due to power constraints. In 2024, the sector leased 5.7 GW but the US grid only turned on 4.7 GW. In 2025, the sector leased over 13 GW while the grid added another 5 GW. This year the sector will lease 16-19 GW. Over 3 years, we have 23-25 GW of leases but not enough power.
David Westin

You anticipate there will be IPOs and traded securities in data centers?
Mark Ganzi

Blackstone just launched an IPO for a stabilized data center REIT. We created the first private data center yieldco in 2018. You'll see more public equity issued. There's so much capital in the sector that investors need to create DPI and return capital to LPs. Public securities, recapitalizations, continuation funds, and asset sales will all be used.
David Westin

How does your new relationship with SoftBank change your business?
Mark Ganzi

It's actually an old relationship - we've provided fiber connectivity to SoftBank for over two decades. The relationship deepened when they launched Project Stargate with Oracle and OpenAI. We created a new partnership focused on 'digital infrastructure 2.0' - AI factories, robotics, smart cities, autonomous infrastructure. The power of the two platforms together is incredible.

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