I Squared Capital has acquired 10 data center facilities from Cogent Fiber for $225 million, marking a significant investment in AI infrastructure. This move underscores the industry’s shift from large, centralized data centers, which are designed for AI model training, to more localized facilities that support low-latency AI inference workloads, bringing data processing closer to end-users. Gautam Bhandari, co-founder at I Squared, emphasized the importance of location, power, and connectivity in determining the long-term value of these assets, which offer 53 megawatts of power capacity and approximately 259,000 square feet of colocation space across nine U.S. markets.

Cogent Fiber: Cogent Fiber is an indirect wholly owned subsidiary of Cogent Communications Holdings that operates data center facilities derived from repurposed network sites. The company sold a portfolio of ten facilities across nine U.S. markets to I Squared Capital as part of its strategy to divest non-core assets while continuing to manage its broader colocation and connectivity operations.
Gautam Bhandari: Gautam Bhandari is the co-founder, managing partner, and global chief investment officer of I Squared Capital, where he oversees investment strategy and chairs boards of portfolio companies. He highlighted the strategic value of the acquired facilities, emphasizing location, power capacity, and connectivity as key determinants of long-term data center performance in supply-constrained markets.
I Squared Capital: I Squared Capital is a leading global infrastructure investment manager focused on digital infrastructure assets including data centers. In this deal, the firm acquired a portfolio of facilities from Cogent Fiber to establish a new U.S. data center operating platform dedicated to colocation, high-density deployments, and AI inference infrastructure. The manager has also recently expanded its presence in Latin America through a majority stake in a major Brazilian data center platform.
Cogent Communications Holdings: Cogent Communications Holdings is an internet service provider that operates through its indirect subsidiary Cogent Fiber to manage data centers and network infrastructure. The company recently entered into an agreement to sell ten data center facilities, aligning with efforts to optimize its portfolio amid ongoing operations in North America and Europe.

AI Workload Shift: The industry is experiencing a transition from centralized data centers optimized for large-scale AI model training toward more distributed facilities located closer to end-users to support low-latency AI inference workloads.
Data Center Optimization: Location, reliable power access, and robust connectivity remain critical factors driving the long-term viability and value of data center assets in regions facing supply constraints.
Infrastructure Investment: Infrastructure investors continue to prioritize AI-related digital assets in 2026, with growing focus on edge and inference capabilities to meet evolving demand patterns.