Not all telcos need to build their own AI factories

Executive Briefing Service, Network Innovation

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Recently, several telcos made the news with AI factory initiatives. We outline the reasons and the approaches to these investments.

Welcome to our ‘Coffee break reading’. These pieces are designed to be short and easy to read, presenting our opinion on a hot topic and challenging you to think about it too.

In this edition, we focus on recent moves by telcos in creating their own AI factories – and suggest why this is not necessarily the right step forward for all operators.

AI factory is a term that refers to a data centre specialised in AI workloads (or a cluster of servers dedicated to AI workloads, within an otherwise general-purpose data centre). Several telcos have made headlines recently by announcing their intentions to build AI factories. We believe this to be a promising opportunity for telcos that have the right mix of existing services and geopolitical environment.

Download now to get our take in a 7-minute read.

Our insight covers the following key points:

  • AI factories are highly specialised data centres
  • These factories are not new, but they are a new game for telcos
  • Depending on the region, AI factory investments are commercially or politically driven
  • The European Union’s approach to AI factories
  • Telcos’ play in AI factories: 15 and counting
  • AI factories and the infraco/servco play

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Emma Buckland

Emma Buckland

Emma Buckland

Principal Analyst

Emma has worked in the TMT sector since the end of the 1990s, first at operators in France and the UK and later as a consultant and analyst. In her day to day job at STL Partners, she gets involved in quantitative analysis and is part of our telco cloud practice. Since 2022, she has been the lead analyst of the Telco cloud insights service and is a frequent contributor to its tools and reports, including on open RAN and cloud-native transformation. Emma holds an MSc. Engineering from Ecole Centrale de Lyon.