BCE Inc., the parent company of Bell Canada, has announced plans to invest $1.7 billion to develop a state-of-the-art artificial intelligence data centre near Regina, Saskatchewan. This facility, which is set to become the largest AI data centre in Canada, aims to enhance BCE’s revenue streams and support its growing commitment to artificial intelligence.
BCE’s Ambitious Data Centre Project
Situated in the rural municipality of Sherwood, the new data centre will have a capacity of 300 megawatts. Construction is scheduled to start this spring, with the first phase expected to go live in the first half of next year. BCE plans to finance this project through a combination of cash reserves and additional debt.
Funding and Financial Outlook
- Total investment: $1.7 billion
- Investment planned for 2025: $1.3 billion
- Annual revenue projection: $500 million
- Annual EBITDA: $400 million
- Annual free cash flow: $250 million
BCE expects that the initial costs will not significantly impact its debt leverage and anticipates that revenue and cash flow will stabilize within three years. The data centre will also create at least 80 full-time positions, alongside 800 construction jobs during the building phase.
Challenges and Sustainability Measures
Saskatchewan, while an unconventional location for such a facility, presents certain challenges such as securing land and reliable energy sources. As traditional power sources dominate the province’s electricity generation, BCE is prioritizing minimizing its environmental footprint. The company plans to utilize a closed-loop cooling system to conserve water and explore options to supply waste heat to nearby educational institutions.
Collaborations with U.S. Companies
BCE’s data centre will be leased primarily to U.S. firms, specifically Cerebras Systems and CoreWeave Inc., both of which will set up their computing infrastructures at the site. BCE has indicated that a significant portion of its capacity will also be reserved for Canadian businesses, government entities, and research organizations.
Strategic Advantages
By focusing on the foundational aspects of data centres—land, power, cooling, and fibre optic connectivity—BCE is mitigating risks associated with the rapid technological advancements in computing hardware. The company is strategically avoiding investments in compute hardware which tend to depreciate quickly.
Future Projections
Looking ahead, BCE forecasts revenue growth to be stable in 2026, although a notable decline in free cash flow is anticipated. Nevertheless, the company has upgraded its long-term outlook for revenue growth and free cash flow improvement, signaling confidence in its overall strategy.
BCE’s commitment to establishing this AI data centre in Saskatchewan underpins its ambition to remain at the forefront of the telecom and AI sectors, while navigating the complexities of energy resources and market demands.
