I Squared pays $225 million for Cogent inference capacity

I Squared Capital bought $225 million of data center assets from Cogent Communications, Reuters reports. The deal targets inference workloads specifically. That matters because inference is where the margin compression happens at scale—every token served costs money, and the unit economics tighten as throughput climbs.

The hyperscalers are moving in the other direction publicly. Microsoft, Google, Amazon and Meta announced a joint initiative with Elemental Impact, a nonprofit investor, to pilot advanced cooling, energy storage and low-carbon building materials in their data centers. Axios frames it as an attempt to use the AI buildout as a proving ground for decarbonization tech rather than a new emissions source.

The climate optics and the inference capital are not contradictory. The hyperscalers are spending record capex on training infrastructure while their served-token volumes climb faster than per-token costs fall. I Squared is betting that someone has to own the racks where those tokens actually run, and that the hyperscalers will lease rather than build all of it.

Inference infrastructure trades at different multiples than training clusters. Training capacity depreciates as the next architecture ships. Inference depreciates as the model weights get cheaper to serve. I Squared is pricing in a world where inference demand grows faster than per-watt efficiency gains, at least through 2026.

The Elemental partnership reads as alignment theater—joint press, nonprofit branding, no binding commitments. The I Squared deal is a $225 million call on inference volume. Watch which one the hyperscalers fund with actual capex next quarter.