Jim Fagan purchased Aqua Comms within the closing days of 2025 considering its transatlantic submarine cables would final him into the subsequent decade with out new funding. “By the point we took it over and with demand coming, we have been filling these items sooner than we might get capability,” the CEO of EXA Infrastructure advised Mild Studying this week.
Submarine cables are just like the unglamorous base in a human pyramid, an ignored set of muscular tissues that permits the upper layers to gyrate. They exist in a murky world, unseen by all besides the occasional translucent fish passing overhead at implosive depths. The common UK smartphone punter would possibly whizz by 10 gigabytes a month. Three miles down and some hundred west, the everyday submarine cable is dealing with petabytes.
However these transatlantic routes connecting Europe to North America have been wanting a lot busier than Fagan had anticipated just some months after EXA accomplished its Aqua Comms takeover. The deal introduced possession of a number of submarine cables, together with American Europe Join-1 (AEC-1), AEC-2, CeltixConnect-1 (CC-1) and CC-2. It additionally gave EXA a stake within the Amitié cable system (AEC-3).
“AEC-1 is taken into account in all probability the second most engaging route, in case you’re on the lookout for latency throughout the Atlantic, after Categorical,” stated Fagan, referring to his personal EXA Categorical cable, which stretches almost 5,000 kilometers from Canada to the UK. Previously a competitor, AEC-1 gave EXA another route and additional resilience. However the world’s insatiable urge for food for information means capability on all of the transatlantic routes is shortly filling up. “You do the enterprise case, proper, and also you refill a fiber pair in three, 4 years,” stated Fagan. “We’re filling it up in lower than 24 months.”
Pairing up
That has prompted EXA to start work on a brand new transatlantic cable. The corporate’s ninth, “EXA Meridian,” as it’s referred to as, would be the first in a decade constructed by an operator and never a hyperscaler, it says. When EXA was rolling out transatlantic cables earlier than 2020, they got here with six fiber pairs, in keeping with Fagan. The brand new 6,552-kilometer addition, operating from a touchdown station in New Jersey to at least one close to Bristol within the UK, will characteristic as many as 24 and convey “520 terabits” of capability to the market, he stated.
It should shock nobody to listen to Fagan attribute a lot of the visitors demand to AI and the extra content material it’s creating. Mannequin coaching and inference wants have had no discernible affect on utilization by strange smartphone shoppers. Ericsson’s biannual Mobility Studies have not too long ago proven an uptick within the fee of knowledge visitors development, which had been falling for years. However there may be nothing in that slight improve to counsel AI represents a brand new paradigm. The pile-up is occurring within the bowels of the community the place EXA lives.
Site visitors going backwards and forwards between information facilities naturally accounts for lots of the current development, and Europe stays one thing of an AI void, from Fagan’s perspective. “The place the information facilities are proper now – the place they’ve gotten them up and operating on the gigawatt degree – they’re principally all in North America or the Nordics,” he stated. “Europe hasn’t seen these but, so what they’re having to do is pump all that visitors transatlantic to sort of feed these new information facilities there.”
If the European AI void introduced a submarine opening for EXA, Fagan and his crew have needed to safe a enough quantity of future enterprise to justify the outlay. That course of began a couple of 12 months in the past, and EXA’s admonitions a couple of looming capability crunch at first provoked skepticism.
Its determination to start rollout is proof that the temper modified and sufficient prospects have been finally persuaded of the necessity to lock up capability. “You get the mission funded to a degree the place you are on a suitable return,” stated Fagan. “You principally derisk it.” Demand clearly comes from hyperscalers and so-called “neoclouds” investing in AI infrastructure, however Fagan additionally counts monetary companies firms amongst his largest shoppers. “What they’re doing is that they’re truly feeding their AI engines backwards and forwards from all their information facilities for all their operations.”
Backside feeders
Monetary particulars concerning the funding should not being disclosed by EXA, which has been privately owned by I Squared Capital since 2021. What Fagan will say is that initiatives together with the brand new submarine construct are anticipated to extend capital expenditure, which got here to about €137 million (US$158 million) in 2024, in keeping with the final set of accounts filed with UK authorities by EXA Infrastructure Holdings.
“What we’re getting requests for now’s new builds with extra capability than what we have already constructed, and by an element of ten,” he stated. “What that is doing is then clearly a fantastic alternative for us, however it’s pushing up the capex. We now have to stability that with what’s the suitable mission – how can we do that inside our funding envelope.”
Filings with Firms Home, because the related UK authority is understood, are all the time a 12 months or two old-fashioned. However, in keeping with essentially the most not too long ago filed set of economic accounts, EXA made revenues of about €353 million ($407 million) in 2024, a rise of about 2% on gross sales in 2023. Subterranean versus submarine exercise is accountable for lots of that enterprise, with EXA linking information facilities on land to high-speed optical networks. Larger prices drove its web loss up a fifth, to nearly €152 million ($175 million).
Laying the world’s longest hose pipes throughout the ocean flooring is not a five-minute job. Moreover lining up distributors together with Xtera to fabricate the cable, EXA has needed to discover out there slots with cable-laying vessels. “Loads of ships are booked for years,” stated Fagan. The brand new route isn’t anticipated to be operational till the ultimate quarter of 2029.
However EXA does now have a “contract in pressure,” signifying the mission is actual and funded with all of the requisite commitments. “Clearly, we pre-sold capability to a variety of consumers to assist cowl a few of it, after which we’ll preserve some for leases and future gross sales,” stated Fagan. It should imply nothing to the ocean’s backside feeders that drift above it every single day. For the information addicts on land, it might be onerous to dwell with out.
