Igneo’s US data centre strategy: Level-headed voice in the midst of AI hype

Igneo Infrastructure Partners appears intent on proving that pragmatism can be profitable through the seemingly successful implementation of its digital infrastructure strategy in the US.

The infrastructure investor with Australian roots has entered the lucrative American data centre sector with the acquisition of US Signal in 2023 and has since doubled the company's footprint by sticking to its core mandate to serve enterprise customers—the OG data centre users, if you will.

Headquartered in Grand Rapids, Michigan, US Signal began its life in 2021 with a mandate to provide data centre, connectivity, cloud hosting, colocation, data protection, and disaster recovery services.

At the time of acquisition by Igneo, the company owned and operated a 9,500 route mile fibre network and eight data centres with a presence in nine US states in the Upper Midwest.

As of April 2025, US Signal operates 16 data centres – logging a staggering 100% growth in just two years by sticking to its original mission.

Michael Ryder, partner and co-head of Igneo in North America, said: "We intend to stick to the company's original mandate, it is what we are good at. The benefit of this strategy for us is that demand in the space continues to grow even before you get to the Artificial Intelligence (AI) use case.

"We have a network of 16 data centres that are in good locations, mostly in urban settings with low latency to local markets. This makes it ideal for potential future AI use cases, but the demand in that space is currently very nascent."

AI processing has dominated the headlines due to the popularity of software such as ChatGPT. The vast amount of processing capacity needed to operate AI tools, as well as the corresponding energy usage, has become central to the discourse surrounding the global transition to clean energy sources.

The sheer amount of capital being pledged to build up the sector – $200 billion (£151bn €176bn) by Meta alone – and policy proposals by governments across the globe to prop up and attract AI investments coupled with a sharp rise in proposals to build data centres capable of AI processing can give off a misleading view on the maturity of this sector.

Ryder added: "Commercial adoption of AI is starting to take hold, but there will be an adoption curve. Not everyone will switch to 100% AI overnight. The demand will increase slowly.

"We intend to back the enterprise use case for AI, which will be facilitated through much smaller facilities like the ones US Signal operates. We may add a couple of MW to existing capacity to make them AI-ready, but we will not venture into the hundreds of MW range."

US Signal develops what can be classed as small-scale data centres, with the largest ones in the portfolio topping off at around 3MW. The company's buildout strategy has been focused, primarily, on the acquisition and upgrades of brownfield sites.

"Right now, we are more focused on acquiring sites with existing grid connections to build our portfolio. In the near term, we will add capacity as required, which is far less complicated than trying to secure a new grid connection at a greenfield site. The company has a fantastic footprint in the Midwest, and we will expand to where we see opportunity. Having a view on local demand is important to us so we can continue to execute our strategy," Ryder clarified.

By focusing on smaller facilities, US Signal, for the most part, avoids the energy access crutch faced by developers that propose large campuses. There are, however, challenges in certain jurisdictions which receive an overwhelming number of new load applications relative to the number of people available to process them at the utilities, leading to backlogs and delays in delivery.

Ryder has reiterated that there is enough enterprise to sustain US Signal's growth. He continued: "We are very happy with the growth so far and will continue to push ahead, maybe not at the same pace observed over the past two years, but we are certainly expanding.

"Hyperscale is headline-grabbing, most of the time due to the sheer scale of investment, but this does not take away from the use case on a smaller scale. We do not expect the fundamental underlying enterprise demand to go away, as you see AI and hyperscale demand increase."

Igneo used "very conservative leverage" in addition to balance sheet reserve to fund US Signal's expansion over the past three years.

Ryder remarked: "It is a different ball game compared to hyperscalers. US Signal's expansion is an ongoing process. The dollar amounts are much smaller, and our customer base is much larger, so we are able to expand even without prior end-use commitments. Having said that, we will only expand our base where we see the potential for increased demand."