Tract helps hyperscalers to meet their data center needs: CEO

As the AI boom accelerates, companies will require data centers to power their platforms. Digital infrastructure startup Tract has positioned itself to address this growing need.

Tract CEO Grant van Rooyen joins Market Domination Overtime to discuss his company's approach to helping businesses meet their data center needs.

Van Rooyen explains that Tract is addressing the data center crisis by handling "all the complicated and hard to do part[s] of infrastructure." Tract's strategy includes locating suitable campuses for data centers, ensuring sites have access to appropriate infrastructure and energy sources, and preparing these sites so that customers.

Hyperscalers, in particular, can "move with speed and certainty and come in and deploy their data centers and be able to respond to the demand signals that they're seeing for their services," van Rooyen comments.

Tract's client base includes major hyperscalers, such as Microsoft (MSFT), Nvidia (NVDA), Amazon (AMZN), and Meta Platforms (META).

Van Rooyen highlights that regions like Arizona present ideal markets for data center development. Additionally, van Rooyen notes that as these data centers are built, it will contribute tremendously to job growth within the US.

"We've been fortunate thus far that we and our industry has been able to find the talent and train the talent, but as we continue to grow our industry north of 15% for the next ten-plus years, that challenge is going to get bigger," he tells Yahoo Finance. "But it also presents a wonderful opportunity. These are high-paying jobs, these are skilled workers, and they're durable jobs,"

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Angel Smith

Video Transcript

The artificial intelligence boom has brought this to to the spotlight demand for data centers tracked a developer of data center parks is increasing its skin in the game with plans to host one of the nation's largest data center complexes tracked anticipating up to 20 million square feet of data center space across as many as 40 individual data centers.

For more on this bet on A I.

Let's get to track CEO grant.

Van Rooyen Grant.

Thanks for being with us.

So you buy the land, you put the infrastructure in and you hope that somebody's gonna come uh put a data center park there.

How do you figure out where that should be?

Well, thanks for having me, Julie.

It's a pleasure to be on with you and your, your viewers.

Um The first thing is uh yeah, we've announced uh now four transactions.

The latest one was in Phoenix.

It's 2100 acres contiguous development.

Um And we engage in all of the, the complicated and, and hard to do deployment of infrastructure.

Uh We, we, we locate these campuses uh where we can deliver electrons.

Uh power is critical to data centers as is uh wet infrastructure, water, sewer roads.

Uh and we prepare these sites such that our customers, the hyper scalers can move with speed and certainty and come in and deploy their data centers um and be able to respond to the demand signals that they're seeing for their services.

Um uh In the in Phoenix, as example, it's a top two or three absorption market for data centers in the United States.

It's a fabulous market, robust uh demand trends.

And uh those are the types of markets that we've been deploying our capital in who are your customers?

Grant.

Uh Josh look, our customer base is, is primarily the hypercars, the uh those like Microsoft, Amazon, Google, Meta oracle, NVIDIA and others, those that are uh looking to build these facilities, data centers and house their server equipment so they can provide services to their customers.

Those are, those are our primary end users relative to this infrastructure.

Now, traditionally grant um some of these data centers had to be located in cold places um in part because of the cooling um that was employed.

Now the technology has uh changed and advanced a little bit on that front.

So like that this this area we're talking about is in Arizona, which I don't think of as a cold place, I guess at night, sometimes it's a cold place.

But in any case, talk to us about how sort of how geography is also informing where you guys are looking.

Sure II I think the the the concept of data centers only being located in in cold climates is a bit of a misnomer.

Uh Data centers have been deployed for for a long, long time.

In in every climate, there are different solutions to navigate the cooling requirements.

Um But we have the capability and the technology uh today to deploy data centers in in in a multitude of climates including uh hot climates like like Phoenix.

The the primary drivers of location are the consuming eyeballs.

At the, at the end of the day, the the the data, the information that's being consumed or generated out of these facilities is being consumed by human beings.

Um And that means uh uh uh latency matters.

And so having these workloads and this information located proximate to population centers and being uh distributed uh such that there's redundancy as well is, is very important.

And so if you, if you look at across the United States, for example, there are, there are data centers located near all the population centers and certainly the hypercars now are run running at, at 12 to 15 market fabric uh at the market level for their infrastructure.

And uh we think that we think there will be incremental capital of, of those deployments relative to uh improving performance and locating these facilities closer and closer uh to population centers and, and the ultimate consumers.

Yeah, grab, we just got a big jobs report.

Today, I, I'm curious, are you all able to find all the workers you need to get the job done?

Uh Look, Josh, I'd say that's one of the, one of the challenges going forward.

Uh You know, the United States doesn't have enough industrial land first and foremost, and we don't have enough uh skilled workers.

Uh I, if you look at over the next 10 years, the US needs another 300,000 electricians, for example.

Uh So there is a massive opportunity for incremental jobs growth uh driven by the data center use case.

Uh We've been fortunate thus far that we, we and our industry has been able to find the talent uh and train the talent.

But as we continue to grow our industry north of 15% for the next 10 plus years, that challenge is gonna get, gonna get bigger, but it also presents uh a wonderful opportunity.

These are high paying jobs, these are skilled, skilled workers.

Um and they're, they're durable jobs.

And so we think that there's a, if we all plan over the long horizon, which is one of our critical aspects, you know, if you think about our developments, there are at least 1000 acres.

What we announced in Phoenix is over 2000 acres.

Uh That's a, that's a 10 year construction project, but two th skilled men and women working on site just to build the facilities for 10 years.

Um And so there's a good.

There's a good job story in here, but we have to be planful and we have to put those resources in place and train and prepare for it.

Um Grant.

Obviously, there's been a lot of growth in this area at some point.

Do you think it slows down as we sort of move into the next phase of A I where you're seeing less training, more infer or is it still, this is gonna continue, as you said for the next decade at the same kind of pace?

Yeah, Julie, look, we, we think that the, the uh demand trends are not only durable uh but, but they're accelerating.

Uh and we think it's still very early innings uh and whether it's uh a training inference or, or the traditional public cloud use case, all of the those product sets if you will are in their infancy.

Um and or or early innings.

And so we do think that this demand is durable.

Uh We think the um the, the, the and we think there is a use case or a, a case to be made for incremental acceleration.

Uh if we've been growing at 15% in the aggregate, we think there's the potential for that to accelerate beyond which is going to mean we need more and more of these facilities and we need them at ever larger scale, you know, put it into context.

Uh 55 years ago, data centers were consuming 10 to 20 acres.

Today, there are hundreds of acres and tomorrow there are going to be thousands of acres.

Um And that puts incremental pressure on where you can locate data centers and how, how you need to change the planning horizon to be able to curate and gather that magnitude of infrastructure um in one place.

And so that's why we plan over a very long period of time.

And uh but we think the demand side of the equation is very healthy and it's likely to stay that way for a long time grant.

Thank you so much for joining the show today.

Have a great weekend.

You too.

Thanks for having me on.