Bell to open six data centres equipped to power AI models and apps in B.C.

Globe and Mail

6 days ago

Bell Canada said it will open six data centres in British Columbia equipped to power artificial intelligence models and applications, just a few years after it sold off a group of data facilities.
The first of the data centres will come online in June in Kamloops, with the second opening in Merritt by the end of the year. Two more will open in the next two years, with one scheduled for 2026 at Thompson Rivers University. Two others are in the advanced planning stages, according to the company.
Altogether, Bell said its data centres will have the capacity for up to 500 megawatts of electricity, a substantial load that has been secured. Upon completion, the facilities will make up the largest AI computing cluster in the country, according to the company.
'There's been a lot of talk about data centres being built, and visions and ambitions,' said Mirko Bibic, chief executive officer of parent company BCE Inc. BCE-T, in an interview. 'We've got the land, we've got the buildings, we've got the chips in there, we've got the power.'
The computer processing needs of generative AI, which include applications such as ChatGPT, have created a surge in demand for data centres around the globe. The federal government last year announced a $2-billion spending package over five years to help Canadian companies and researchers access AI computing power, and to back the construction of new data centres.
This infrastructure is necessary for Canadian companies, researchers and governments to build and run AI models, which can lead to productivity gains, economic benefits and scientific breakthroughs.
Prime Minister Mark Carney highlighted the potential of AI in his recent mandate letter, and this month appointed Evan Solomon as the country's first Minister of AI and Digital Innovation.
Having Canadian-owned and operated data centres for AI is also seen as a way to strengthen sovereignty and protect sensitive information. Many Canadian companies, governments and public institutions rely on storage, cloud computing and AI services from U.S. tech companies.
As BCE spends on data centres, however, the company is dealing with more than $30-billion in long-term debt. Its stock price has fallen some 35 per cent in the past year and the company cut its dividend by more than half this month.
Mr. Bibic said the company will spend a dollar amount in the low nine figures for its data centre rollout at first, but that number does not include all six facilities. He declined to provide further detail.
The first few are on the small end in terms of power consumption – two are 7 MW and two more are 26 MW. The other two projects have the total capacity for more than 400 MW, which is substantial for Canada.
Large data centre expansions can run into the billions of dollars, based on figures provided by other companies.
'It's a big investment in the scheme of AI in Canada, but we do invest over $3-billion a year,' Mr. Bibic said, referring to the telecom's capital expenditures. The company is not receiving federal funding through the AI infrastructure program, but Mr. Bibic said he is open to applying. 'It'd be wise for us to do,' he said.
Telecoms have operated data centres before, in hopes of expanding into cloud computing and other services. But with lots of supply available, companies slashed their prices and struggled to compete.
In 2020, BCE announced the sale of 25 of its data-centre facilities to U.S. company Equinix Inc. for just over $1-billion.
'There was no particular differentiation for Bell in that circumstance,' Mr. Bibic said. AI provides a different opportunity, he continued. Not only is there demand, but sovereignty, data protection and cybersecurity are increasingly important issues in Canada.
'You've got AI as a clear winner in terms of massive growth potential now and for the long-term, and we're extremely well-positioned to lean in,' he said, adding the company has a large existing enterprise business and that the revenue potential with AI is significant.
BCE is not the only telecom looking to AI for growth. Telus Corp. said in March that it is equipping a facility it owns in Quebec to handle AI, and plans to later do the same in B.C.
Alberta's government is trying to attract companies to build AI data centres, emphasizing the province's abundant natural gas reserves for electricity generation.
But one of the advantages of B.C. is access to clean hydropower, along with fibre-optic connectivity. 'I won't dismiss the ambition, but what differentiates this is the fact that these are real [facilities], at-scale, backed by Bell and with low-cost sustainable energy,' Mr. Bibic said. Longer term, the company has the potential to expand its AI footprint in Manitoba and Quebec, which also rely on hydropower.
The need for data centres depends on the pace of AI adoption, which some analysts say is uncertain. 'A lack of clarity about future demand makes precise investment calculations difficult,' McKinsey & Co. said in a recent report. 'Overinvesting in data centre infrastructure risks stranding assets, while underinvesting means falling behind.'
Mr. Bibic said the company is 'methodical' about its expansion. The facility opening in June will be occupied by Groq Inc., a U.S. company that competes with chip maker Nvidia Corp. and offers hardware and software for running AI. Bell also partnered with Thompson Rivers University for the data centre opening next year, allowing students and faculty to train and run AI models.
'We are securing demand and building at the same time,' Mr. Bibic said. 'It's not, 'Build it and they will come.''