Carrie Charles (00:01.464)
Thank you for joining me today again on Let's Get Digital. I am glad you're here. We have an exciting episode for you today, someone I respect immensely and I've known for many years. It is Raoul Martinek. He is the CEO of Data Bank, a fast growing, very fast growing data center and cloud infrastructure company helping power the digital economy and the rapid rise of AI. Raoul.

Thank you for being here again.

Raul K. Martynek (00:32.474)
and Kerry, thank you for having me. It's great to be here.

Carrie Charles (00:35.24)
So, Roel, I had you on the show, this was years ago, so I really wanted you to come back on. There's been a lot happening in your space, and just talk about it a bit, give us some ideas of the future, and let us see into your crystal ball a bit. But first, we wanna hear about you. So, please tell us a little bit about your journey and how you got to your seat.

Raul K. Martynek (00:58.438)
Sure, well, I won't go too long because I've been in the space a long time. So it is a long story. But no, I've been fortunate to be in kind of digital infrastructure for the last 30 years. You know, got in at the advent of the commercial internet, you know, in the mid 90s. You know, at the time, obviously the internet was just emerging, know, data centers were not a thing. And it was about telecom, right? So like a lot of folks that started back then, I started in telecom.

and it was an entrepreneurial business. was what was called the CELAC. It was in the Northeast and it was the dot com era. So we were able to grow the business and raise institutional capital in 1999. That was my first kind of experience with institutional capital.

Since then, I've been fortunate enough to go from telecom to fiber to cloud. And then over the last 15 years or so into data centers, always working with sponsors, building businesses in the space. And then got the data bank, which is obviously where I'm currently at.

about 10 years ago at this point, which is kind of crazy. I knew Mark Anzi from Digital Bridge. And at the time, Digital Bridge was an emerging platform. They were looking to invest in data center businesses. And given my experience there, Mark asked me to join, which I did. And we ended up acquiring Data Bank in 2016.

when it was six data centers in three markets. So over the last almost 10 years, we've been able to grow it to be one of the largest data center businesses in the US. So it's been an incredible journey.

Carrie Charles (02:42.584)
So tell me more about Data Bank.

Raul K. Martynek (02:45.232)
Yeah, so look, we're a data center operator and developer, you know, focused here in the US. You know, today we have the largest geographic footprint of data centers in the US. In other words, we're in more markets than anyone else.

It's a very important factor from my perspective, because when customers make a decision around where to put their IT assets, where to co-locate geography typically is one of the top criteria, right? So if you, the way I look at it is we're in more geographies, which basically means we have more opportunities to solve customer needs. And that's been a big part of our success, having this very large geographic reach coupled with the ability to

invest in meaningful size data centers which we have been over the last couple years.

Carrie Charles (03:36.738)
So the data center space has changed a lot over the last five years even. So tell me what has changed in your view and also how have you navigated some of these challenges?

Raul K. Martynek (03:43.292)
Sure.

Raul K. Martynek (03:51.122)
Yeah, you know, look, it's really interesting just looking at how it's changed just, you know, while I've been here at Data Bank. So when I got here in 2016, you know, the data center space, it was obviously very well established. In fact, at the time there was, you know, five public companies. But when you actually look at like the size of those companies, they were all relatively small, right? Equinix was like a two billion a year business, you know, switching core site and Cyrus ones were, you know, 300 to $500 million a year.

businesses, right? And Data Bank was a $50 million business, right? So again, the sector overall was relatively small. And back then, you know, ultimately, you know, customers obviously same same product, right? Same, you know, form factor a data center, but you know, their needs were just incredibly smaller, right? You know, I remember

when we did our underwriting for DFW3, which was going to be our largest data center at the time in 2016, it was going to be a 10 megawatt data center. And people were like hand wringing over like, are we going to be able to sell that capacity? And at the time, if you could get a one megawatt or a two megawatt deal, was considered just massive and everyone was super excited. And really that's been the big change. You fast forward to today.

And the requirements have just gotten just enormous, 10X, 20X, 100X of what was back in 2016. So that's, I think, been the biggest change in the sector is just kind of the scale of it has gotten just increasingly larger. Obviously, that was happening through 2015, 16 through, call it pre-AI.

you still add these increasing requirements. then AI showed up in 2023, and that's kind of step functioned it higher in terms of the size requirements, right? Enterprise deals in 2015, like I said, were one or two megawatts, hyperscale deals back then, if it was a big one, might be 10 megawatts or 20 megawatts. You fast forward to today, and we have enterprise deals that are 20 or 30 megawatts.

Raul K. Martynek (06:13.47)
megawatts, and then you've got hyperscale deals that are 250 megawatts to a gigawatt. So that's kind of really been the evolution of the space and obviously why it's become front and center in terms of people's minds.

Carrie Charles (06:30.178)
Has it been challenging for you to adapt to all of these, this insane growth in these changes?

Raul K. Martynek (06:37.294)
Yeah, listen, you know, anytime you grow a business, you know, from where we started to now, there's always going to be scaling challenges, right? You know, look, it has been nine years too. So, you know, it's been somewhat of a not, you know, gradual, but, you know, rapid type of, of, you know, growth. You know, I think, you know, two things on that, you know, the hardest things are, you know, obviously attracting, you know, good talent into the organization because people are the foundation of your business.

and as you need to get more and more people, that becomes harder and harder, especially to maintain the quality of that. Number two, just execution and kind of customer experience becomes harder as you scale out these businesses. You have a lot more layers of management in a business. So the execs are less connected to what's happening on the ground and you have to figure out a way to make sure, to ensure that you don't

lose that connectivity with the customer experience. And then the third.

and really challenging piece is capital, right? when we bought the business in 2016, we bought the entire business for 320 million at the time, which was considered a good size transaction. Now we're building data centers that a single data center is 500 million of capital, right? So that's kind of the capital aspect has become one of the

real determinants to how quickly you can grow is the ability to access capital and the ability to access capital on favorable terms.

Carrie Charles (08:22.584)
So obviously there's a lot of hype right now for AI, for data centers. I mean, I can't even read anything or the Wall Street Journal every day without hearing something about it. So is this demand real? Is it durable? I mean, what could derail it?

Raul K. Martynek (08:41.254)
Yeah.

That's a great question. So I'll start with your last part of that question. Is it durable? Absolutely. 100 % is durable. Right. My strong view is, you the way I describe data centers is, you know, what is their actual function? Their function is to facilitate technology adoption for, you know, humans, right? For businesses and people, right? If you think about everything on your phone, everything on your computer, it originates and terminates in a data center.

Right? So what we've obviously seen over the last 30 years is this, you know, insatiable demand to consume technology, which means that, you know, that you need more data centers. So my strong view is, you know, 10 years from now, we're going to need more data centers because humans are going to find more and more ways to consume technology, adopt technology for all the reasons that, you know, we know about it. It's for business, for entertainment, for education, for communication, for, you know, application.

So there's that kind of macro demand trend. And then when you kind of peel down or peel back that onion, there's a lot of different currents in there, right? So the way I look at the market right now is, and we're in a position where Databank, we have this large footprint, we have 2,500 customers. So we get to see a lot. have a wide range and a wide aperture of kind of visibility into customers' consumption of technology.

And so we look at our business and it's got a big enterprise segment, right? Those are all fortune 1000 type companies down to mid-size companies that obviously are a hundred percent dependent on their data, their applications. And that segment of the market we think is really healthy. We're seeing enterprises invest in technology adoption, invest in digital transformation, invest in hybrid architectures. That's all driving enterprise demand. The hyperscalers, obviously they're

Raul K. Martynek (10:41.716)
you know, everyone knows about them now, everyone knows about their growth, you know, they, you know, for folks that haven't been following it, they just all came out and reaffirmed or affirmed what their CapEx commitments are going to be for 2026. And it's staggering, right? You know, you take the top five, six hyperscalers in their capital commitments, you know, for 2026 are like 625 billion, up from like 400 billion, 450 billion in 2025.

So there's no doubt that cohort is going to invest. And then you have the kind of AI companies, right? The open AI is the anthropics, the perplexities, the cursors and Silicon Valley. I saw one stat where.

Silicon Valley has invested $200 billion in AI startups. So all these companies that are trying to bring, know, LLM based products to market, well, guess what? They're all consuming tokens, consuming GPUs. And that's the part of the market that I think is, it's nascent, right? Because it really started, you know, two and a half years ago, three years ago. And those business models are still not a hundred percent proven in terms of their

ability to become profitable. So that's kind of the part of the market that I think when you read these articles about AI fears and AI bubbles, it's that segment of the market that people are focused on. The hyperscalers have real businesses, right? These enterprises obviously have real businesses. And now you have this kind of new entrance that are trying to form businesses. And obviously, there's a huge expectation that there are going to be winners there.

Certainly when you look at past trends, not everyone's a winner, right? And ultimately there's gonna be a bunch of creative destruction that happens. But I think, again, for long-term players who are not looking to capitalize on a short-term euphoria, I think it's a really good market to be in and a great market to be in over the long-term.

Carrie Charles (12:52.66)
So it sounds like the capital is there and willing and able and ready, but what are some of the bottlenecks that could prevent these data centers from being built?

Raul K. Martynek (13:02.45)
Yeah, so there's more and more bottlenecks occurring every day. yeah, the capital's there, but guess what? There is an unlimited capital. And you're already starting to see that Oracle had some issues in terms of being able to continue to lease capacity in the marketplace. obviously, was two weeks ago, I think, that they came out with a $50 billion debt and equity

that they're going to enact over the next year or so. So you're starting to see even at the scale that we're talking about, the financial system can't digest all that capital. So I do think access to capital is going to be a constraint for people that I think that as we continue to march forward, that it will become more more scrutinized over what investments get made. So I think that's gonna be one. Obviously, we still are

We're in a situation where power is a regulator of capacity. I mean, there's a lot of capacity that is being leased. Last year, the estimates are it was a record year that there was, call it 14 gigawatts of data center capacity that was leased in 2025. I will guarantee you that all 14 gigawatts of that, they had a very clear.

pathway to power. You wouldn't be leasing data center capacity either as a developer or as a customer if you weren't 100 % convinced that there was a pathway to power that, right? So yes, there's a bottleneck around power, but obviously the evidence shows that the industry is figuring that out, but that's going to continue to be somewhat of a regulator. And then the third one is rising costs.

and in lead times, right? You know, obviously with all this demand, the cost to build data centers is going up, so that's putting more pressure on people in terms of is it justified? And then, you know, as a function of that, what we're seeing is...

Raul K. Martynek (15:13.2)
an increasing amount of community opposition to data centers, right? I'm sitting today in New York and New York recently, there's a bill that got introduced at the state Senate level that would put a three-year moratorium on data centers as they understand their full impact to electrical prices and to environmental issues. And I think that's misguided, but it's an example of kind of the reaction that is happening

from the population in terms of pushback on new data center developments. And this is happening in red states and in blue states, right? This is not limited to a particular area. You got some significant pushback in Northern Virginia with a number of projects that have been kind of derailed. And Chicago, so there's a...

This is going to be, it's going to become increasingly harder to build because of the capital, because of the supply chain, because of community pushback and because of power. So, but that's, know, in our view, that's a bad thing, but also a good thing, right? Because ultimately, you know, our sector is in a healthy state from, you know, certainly from our perspective, because there's a good supply demand balance, you know, what one thing that we know about

you know, any type of infrastructure sector is it's supply and demand that ultimately dictates, you know, how good it is for the people that are in it. And right now it's a good time to be a data center developer because, you know, you have more demand than supply and you have these constraints.

Carrie Charles (16:54.126)
How are you preparing for these challenges? If there is such a thing.

Raul K. Martynek (16:57.33)
Um, you know, it's all in the works.

Yeah, no, there is no magic bullet. It is purely grinding it out, right? In all three of these, it means that you need to spend more time on raising capital. You need to spend more time on your supply chain. You need to spend more time and energy and money on community relations and in public relations and things like that. And you got to spend more time on, you know, securing power and making sure that you have a very multi-year type of

of kind of scope, right? mean, you know, seven, eight years ago, you would think about building a data center because it was, you know, 10 megawatt or seven megawatt or 12 megawatt data center. You kind of like decided, okay, in January, let's go do that.

and then you would find a piece of land by March or April and of course the power was going to be there because there was plenty of power at that level and then you know 18 months later you had a data center right now it's like uh-uh you know right now you know we're buying land right now

where we think the timeline, the power is 2029, 2030. But that's the way you have to think, right? So that's the way ourselves and other people in the sector are responding. We're just taking a very long-term view on things. And that's a function of all those kind of, you know, the slowdown that happens through all those constraints that we just talked about.

Carrie Charles (18:06.03)
Wow.

Carrie Charles (18:24.792)
So across the US and also globally, where do you see capacity scaling the fastest over the next decade? And what differentiates markets that win versus, again, what we talked about, some that stall?

Raul K. Martynek (18:39.858)
Yeah, well, listen, you know, on a global basis, the US is well positioned to continue its leadership role. I think 60 % I think is the number I've seen of all the data center infrastructure in the world is in the US.

and the US is going to continue to do well, right? Because ultimately, while everyone's complaining about all these issues, there are things that are being done to create new generation, to create new distribution, to increase supply chains, to allow for this development to continue. So I think we're extremely well positioned on a global basis. Within the US, right now, there's a couple of locations that are better positioned than others.

And that is really a function of power availability and the ability to get new power onto the grid. I'm based in Dallas and Texas, in my view, is in a great position to emerge if it keeps going to be the number one data center market in the country and surpass Ashburn. And that's because Texas has a very can-do attitude. It also has a unique power situation where the Texas

Texas has its own grid. called the ERCOT grid and it's been streamlined over the last decade or more to facilitate people connecting to the grid and to facilitate distribution to endpoints. investments are being made there by ERCOT and the utilities to do that. So I suspect a market like Texas is going to do well. What you're also seeing as a function of all this demand is locations that

heretofore we're not data center locations are becoming data center locations. You know, you're seeing people build data centers in North Dakota, in Wyoming, in, you know, Louisiana. You know, some of that is being done by the hyperscalers who traditionally have done that in the past, you know, where they can, they have such big needs that satisfy themselves. They can say, okay, you know what, it's okay if we're in, you know, rural North Carolina and build a data center cluster that works for us. You know, people like ourselves.

Raul K. Martynek (20:56.664)
You know, given our broad range of customers, know, my enterprise customers, don't want to go to North Dakota. So we're not going to go there, right? We're going to stay in Metro markets, but the AI companies, especially the new ones and the GPU as a service companies, you know, they're willing to go to those locations to satisfy, you know, their near toward demand needs. So I think it's going to be a combination of, you know, some existing markets, some new markets that will kind of, you know, emerge over the next, you know, five to 10 years.

Ultimately, no one really knows how much of this infrastructure you need. think that's a big question. And we'll find out. If I knew the answer to that, I wouldn't be sitting here.

Carrie Charles (21:39.362)
Very true. So Data Bank has got such an exciting growth story. Looking back, Roel, what decisions do you feel have made the biggest difference? It could be one decision, it could be two in that growth. And also it's interesting, you did decide to stay private versus pursuing an IPO.

Raul K. Martynek (22:00.976)
Yeah, so yeah, couple things come to mind on that. we've been in a fortunate position where, know, kind of to your topic there around an IPL or liquidity or an exit is that Data Bank was originally stood up, it was stood up as a separate SPV, right? So we are not in any fund, which in funds, you know, the way they work is people raise money, put it into a fund, they make investments. And then there's an end of life where the fund

to liquidate those investments. So we've been fortunate in that we have an open-ended kind of platform where we can continue to bring in capital to grow the business and to rotate investors so that we can keep going. And that's been, you that decision, which kind of was purposeful and also kind of situational when it happened back in 2016.

looking back at it was pivotal for our ability to continue to grow as an independent platform. that would be one. Another one would be, we were fortunate to align ourselves with some great investors, right? Digital Bridge, of course, as our lead investor. But over the years, we've been able to bring in folks like Swiss Life, which is one the largest insurance companies in Europe. We've been able to support us. In 2024, we raised two billion of new equity with Australia.

Super, which is a pension system out of Australia that has a very long-term horizon and deep pockets. that kind of access to capital, given the scale of what we talked about, was critical. And then number three, and really underpins everything, is the people that are in the business. I've been fortunate to attract a great leadership team, the folks that I work with on a daily basis. And then we've been able to attract just a tremendous

number of other really great people so that the business can continue to execute. One of the stats that we like to tout is that Data Bank has had 44 quarters of consecutive positive net bookings. So that means for over 10 years, we've consistently grown the business in and out of any type of market silo or any type of market disruption. And really, we think that is kind of a testament to the quote unquote machine that we've built that can

Raul K. Martynek (24:24.916)
and execute regardless of market conditions. know, knock on wood, we'll continue to do that.

Carrie Charles (24:31.774)
And I know how important the people aspect is to you, Roel. And let's talk about talent for a minute. Where are you seeing the workforce shortages? Are you seeing any specific skill sets in the data center world that are short now and will get worse coming up?

Raul K. Martynek (24:47.976)
Yeah, yes, think, think, look, talent, we spent a lot of time on that, you know, we spent a lot of time on that in two ways. Number one, attracting talent, but more importantly, keeping talent, right? So we, we, we really work hard to ensure that, you know, we're, have a great company culture. You know, we just got, you know, one of the, we just got a nomination for one of, you know, great places to work.

you know, very highly scored in terms of the responses from the employees. In June of last year, we rolled out a company-wide equity program so that every data banker that works at the company has an ability to get a financial stake in the business. So, you know, we're all owners in the business. So those are the types of things that we do to try to, you know, attract, keep people with us that are, you great people. And then on the, you know, on the new

higher front, you look, you're building a lot of data centers. And that's the part that's really accelerating. So people that are in the construction field and the project management field, and then people that are in the facilities management, after you build a data center, you have to maintain it. All those kind of folks are in demand across the country. So those are areas that, you know, we have to really spend a lot of time on and make sure that, you know, they know who Data Bank is and that, you know, we're able to convince them to come

Join us.

Carrie Charles (26:15.788)
So you talked about Data Bank University when we last spoke. I mean, I think obviously what we all need to do is we have to build our own talent. And that that is crucial to be able to carry out these visions that we have. So talk a little bit more about Data Bank University. What prompted it? How did you create it? And what does it do?

Raul K. Martynek (26:26.716)
Correct.

Raul K. Martynek (26:39.29)
Yeah, so listen, Data Bank University is really kind of our online training platform to allow people to advance professionally within the company, right? And that, know, being able to progress your workforce, you know, give them new professional development opportunities, an ability to grow financially, to grow from a managerial perspective is critical to retaining people that are ambitious and good and, you know, A-players, as we say. So the university is kind of a training

platform and it really spans all kinds of disciplines within Data Back. So what we look at is different parts of our organization and how do we create a career path for people in that organization? One of our largest components of folks is data center operations. We have a lot of people that are inside these data centers, caring and feeding for the data centers and for our customers' needs. So we have a structured program there where you come in relatively inexperienced as a DCT worker.

one, you you can go up to DCT three and then a lead. And then from there you can go into managerial position. So we want to make sure that that university underpins their ability to gain new skills and to be able to grow along that way. We do that on the sales side. You know, we have, you know, over a hundred folks on the sales side. And we've been able to, you know, now bring in, you know, more kind of greener type of talent that we think has the right DNA and be able to bring them in.

to positions like a BDR position, which is a business development rep where they're kind of more cold calling or responding to inbound leads. And then from there, get them to an account management position. And then from there to kind of more of a national account manager. And we're seeing some good progression there. So it's really about.

trying to create these career progressions within your functional groups in the organization. And then the university is kind of the knowledge that you need to have as you scale up into these more higher positions of responsibility.

Carrie Charles (28:46.498)
What is the Data Bank way?

Raul K. Martynek (28:49.586)
So the Data Bank way is kind of our cultural cornerstones, our leadership behaviors, right? have got, years ago, actually like in 2018 or 19, we really felt like the business was not hitting on all cylinders that we had kind of, as I like to say, different tribes within the company. By definition, we're a business that is decentralized. We have a thousand associates, but there

65 different markets and then there's people that are remote. How do you get such a diverse geographic group that isn't interacting with each other on a day-to-day basis? How do you get them to operate as a single team? And the Data Bank way is really kind of our cultural mantras that we instituted in the business and that everyone understands, right? And to give you an example, like leadership behaviors, that's kind of

like, hey, how are we going to agree to interact with each other, right? And with our customers, right? So for example, one of our leadership behaviors is take extreme ownership, right? It's like if you see something, you know, we don't want to hear, it's not my job. We want to hear, we have a problem here and we need to fix it and let's coalesce as a group and fix it, right? We have another one that's called collaborate before you escalate, right? We felt that.

You know, back then we were too much, too much, you know, people were peers and they had an issue to resolve, but they weren't really trying to resolve it. They were just escalating it to their manager and then trying to get their managers to resolve it. That doesn't work as you scale. We want to push decision making down as much as possible. So we ended up coming up with that. So it's really a way, it's kind of our own internally developed, you know,

thought process around, you know, how we're going to operate as a group and then how are we going to engage with our customers and our partners so that we can, you know, drive up a great business.

Carrie Charles (30:51.704)
So last question, if the data center industry gets one big decision wrong in the next decade, what do you think it will be? And what should leaders do now to stay resilient, come out stronger, regardless of how this growth cycle plays out?

Raul K. Martynek (31:09.926)
Yeah, that's good question. mean, I think, you know.

If you look at the data center market and you look at kind of some of the ebbs and flows of the data center market, it goes back to what I said earlier, which is this is fundamentally a business about supply and demand. So, you back to the earlier comments, there's no doubt in my mind that demand for data centers is going to be greater. You know, there's going be more data centers 10 years from now, 15 years from now. But, you know, look, in every business cycle, there's, you it's not a straight line.

Ultimately, where I think the sector could get into trouble is if we end up in a scenario where for whatever on some type of short term or medium term basis, we end up with a lot more supply than there is demand because that it's real estate. It's no different than when you buy a residential house or you're looking for commercial office space. When vacancies low, it's a seller's market and when vacancy is high, it's a buyer's market.

periods where there was a lot of vacancy in certain markets and it was a slower dynamic. mean, it's hard to see that right now because of kind of the craziness going on, but to expect this to continue forever is also, I think, crazy. So there's going to be some type of

correction, pullback, slow down, hard to say when. And ultimately, from my perspective, that's where you got to make good decisions around where you're going to develop because it is a real estate business, like I said, and it's location, location, location. So that's kind of the way we think about it. Other people have different views and hey, it's a free market. People can have different views. And then from a leadership perspective, it's feeling that these businesses are going to get a lot bigger, right? That ultimately,

Raul K. Martynek (33:05.288)
everyone's gonna, you we're gonna be, you know, we're now, you know, north of a billion in revenue and, you know, we're gonna be multi-billion in revenue in five years or 10 years, right? So making sure that, you know, we can still scale the business, still maintain that intimacy that we wanna have with our customers, still create a, still have a great working environment. That's gonna be the challenge over the next five to 10 years.

Carrie Charles (33:28.12)
Roel, I always enjoy talking to you. I always learn a lot, and I truly appreciate you coming on the show. This has been fantastic. I'll see you soon. Take care. OK, don't leave yet. Let me just stop here.

Raul K. Martynek (33:34.066)
Okay, thanks for having me, Kerry. It's great to be here. Take care.