Nvidia wants to turn old telephone exchanges into a distributed AI network

Nvidia has approached Apollo Global Management about converting buildings owned by Apollo-backed broadband company Brightspeed into small AI data centres, according to The Information. Brightspeed operates more than 130 facilities across as many as 20 states. Nvidia estimates that the portfolio contains roughly one gigawatt of available power—potentially enough for tens of billions of dollars of Vera Rubin systems—and submitted a written proposal seeking data and site visits this week. The companies have not announced an agreement.

Telephone exchanges are unusually useful brownfield assets. They were built to host communications equipment, have fibre connections, sit close to population centres and often possess electrical service that is difficult to obtain for a new campus. Nvidia has described the concept as an inference network: many smaller locations running already-trained models rather than a single giant training cluster. Suppliers have discussed beginning some retrofits in the first quarter of 2027, potentially including technology from Groq, whose inference technology Nvidia licensed last year.

The plan gained urgency after voters and incoming governors backed restrictions on new data-centre construction. Reusing an existing building can avoid land acquisition and some new-build approvals, but it is not permit-free. Modern accelerators require high-density power distribution and specialised cooling that an old telephone facility was not designed to provide. Aging electrical equipment may raise operating costs, and a portfolio-wide gigawatt is not the same as one contiguous gigawatt: capacity is fragmented into sites whose individual economics, grid connections and local rules differ.

The financial structure is as important as the engineering. Brightspeed is reportedly approaching bankruptcy, so Apollo has an incentive to find a higher-value use for its real estate. Nvidia needs installed power that turns chip orders into operating systems. Apollo has separately agreed to buy tens of billions of dollars of Vera Rubin hardware to lease to SpaceX and is one of six financial groups working with Nvidia on compute-financing platforms. It remains unclear who would buy or lease the equipment in the Brightspeed buildings, how many sites Nvidia wants, or which party would absorb retrofit and utilization risk.

Brownfield compute could be a sensible response to constrained grids: use power and fibre that already exist instead of waiting years for a greenfield interconnection. But it also creates regulatory arbitrage. If a moratorium or community review is written around “new data centres,” converting dozens of anonymous telecom buildings can expand the same electricity, cooling and generator footprint without triggering the same scrutiny. The relevant policy test should follow the load and externalities, not the age of the walls.