How AI infrastructure could be Canada’s hidden asset growth

Artificial intelligence (AI) infrastructure is one of the hottest investments in the world right now, and Canada is best positioned for it. Alternative asset managers are buying up AI data centers left and right, hoping to benefit from the profits AI companies are making. So far, most of the money in AI is made by semiconductor (computer chip) companies, but data centers are another part of the puzzle that could also make a lot of money. By providing the space where AI servers and chips reside, such facilities are absolutely essential for powering the AI ​​economy.

Canada is quickly becoming a major player in the world of AI infrastructure. With plenty of land and a cool climate, Canada has many options that are ideally suited for hosting AI data centers. Cohere Inc is already working on such a data center, a project for which the federal government has allocated $240 million. The same goes for the major US cloud companies, such as AWS, Azure, And Alphabet (NASDAQ:GOOG) have committed to building data centers in Canada.

In this article, I explore the investments Canadian companies are making in AI infrastructure and how they can drive the next big asset growth.

Cohere’s AI data center

Cohere is the main Canadian company currently working on AI. It is a private company that develops large language models (LLMs) for highly specialized industries such as finance and healthcare. The company uses Google Cloud’s Tensor Processing Unit (TPU) servers, making it one of the few companies other than Google itself that can use them. TPU chips reportedly outperform NVIDIA’s best offerings in some respects.

Cohere’s biggest contribution to the AI ​​infrastructure is its planned data center. The company is spending $725 million to build a Canadian data center, for which the federal government contributed $240 million. Cohere’s data center will help the company compete globally with well-funded American and Chinese competitors. The company also plans to rent servers to smaller Canadian companies.

Brookfield is betting big on AI infrastructure

Brookfield Corp (TSX:BN) is another Canadian company that is betting big on AI infrastructure. Through its infrastructure subsidiary Brookfield Infrastructure Partners (TSX:BIP.UN), Brookfield is making big bets on AI data centers and related infrastructure such as telecommunications towers.

Over the past two years, Brookfield and Brookfield Infrastructure Partners have acquired several AI data centers. The most recent deal was a $5 billion deal Bloom energy which will see that company’s fuel cells deployed in facilities across the United States. Brookfield is in the fortunate position of owning strategically located data centers in Texas, perfectly positioned to serve California’s tech giants next door. With Bloom, it could also innovate in powering those data centers.

Placing takeaway meals

The key takeaway from Canada’s AI data center explosion is that there are many ways to play AI. While most investors assume that “AI stocks” are shares in one of the big tech companies, the truth is that there are many other ways to get into AI. While NVIDIA, Palantir and other AI giants are being bid up to multiples of nosebleeds, Canadian data centers are offering sensible valuations. There may be opportunities here that are worth investing in.