Artificial intelligence (AI) is becoming a driving force for businesses. Digital Realty (DLR -1.31%) wants to ensure it can capitalize on the AI revolution. That's leading the real estate company to take steps to confirm its data centers are ready for that future.
The data center REIT recently announced that its newest facility in Japan is AI-ready. Leading AI technology provider Nvidia (NVDA -2.69%) certified that the facility is ready to run Nvidia DGX H100, the company's purpose-building AI infrastructure. It's part of a growing list of Digital Realty facilities ready to support the specialized requirements of AI.
Ready for the future
Digital Realty has been an early partner with Nvidia to ensure its data centers are ready to support the chip developer's DGX infrastructure. The REIT was one of the first data center operators to gain DGX-ready data center certification at the program's launch in 2019. While it now operates DGX-ready data centers in 20 markets worldwide, Digital Realty's newest facility in Osaka, Japan (KIX13) is the first one certified for Nvidia's leading-edge AI platform DGX H100.
Nvidia sees Digital Realty as an ideal partner for helping power the AI revolution. Chris Boyle, the Vice President of DGX systems for Nvidia, stated in the press release detailing its latest certification that "Organizations looking to implement enterprise AI are investing in accelerated computing infrastructure – including hardware and software purpose-built for AI – to deploy their models into production quickly." He noted that the certification of KIX13 in the DGX-ready data center program means that customers will have "access to a flexible, simple option for deploying the world's leading AI platform."
A potentially massive opportunity
Data centers will play an important role in supporting AI because they can house the digital infrastructure needed to train AI models. They also provide the proximity and speed needed to support AI interface solutions.
Chris Sharp, Digital Realty's Chief Technology Officer, stated in the press release unveiling the latest certification, "Digital Realty understands the impact AI will have on the way businesses drive digital transformation in the years to come. However, business breakthroughs made possible with AI can only be realized if enterprises are able to integrate the technology into their operations, and that is where we come in." He noted that the certification of KIX13 as a DGX-ready data center showcases that the company remains "focused on delivering a meeting place that allows our customers to accelerate innovation and growth."
Digital Realty currently operates over 300 data centers in more than 50 global markets. Sharp noted that the company's platform puts it in a strong position to support the "data aggregation, staging, analytics, and management that are critical for optimizing data exchange and maintaining data compliance" for AI.
While Digital Realty and other data center operators already have sizable portfolios, the world will need even more digital infrastructure real estate to support AI in the future. According to a MarketsandMarkets forecast, the information technology industry will need to invest $60 billion in AI-related infrastructure through 2026 to support the technology's growth. That should provide Digital Realty with many opportunities to upgrade its existing data center facilities and build new capacity to support the growth of AI.
These investments will grow its cash flow, supporting the REIT's ability to pay dividends. Digital Realty has increased its payout every year since its initial public offering in 2004.
Embracing the AI revolution
Digital Realty's leading global data center footprint puts it in a strong position to capitalize on AI. Nvidia has put its stamp of approval on the company's newest data center in Japan as ideal for its purpose-built AI infrastructure. That should drive companies investing in AI to use its data centers to support their developments, powering Digital Realty's growth in the coming years. Add in the real estate company's attractive dividend (it currently yields more than 4%), and it's a compelling way to invest in the AI revolution.