And different of our competitors choose to do different ways. Blackstone, by example, is very comfortable standing up a new product and growing through their own teams, they’re really good at it. You see what Ares has done in both ways. They’ve done M&A and they’ve done it through greenfield and then obviously you see what BlackRock is doing as they move into alternatives. I think this will continue. And I do think there’s a number of middle market infrastructure GPs that are subscale, that have looked at going to an IPO route, they realize they can’t get there. It’s tough to get public. We learned it the hard way in four years of building this business where it is. And so I think you will see more M&A activity in the space. Multiples are pretty hot right now.
The GIP multiple was pretty rich. We think it was somewhere in the low 20s. Go figure for this year, sort of full impact of the FRE and FEEUM that GIP will deliver for BlackRock. So we think that Larry and the team did a smart acquisition and it gives BlackRock a whole new suite of products to sell to their clients. And same thing with General Atlantic in terms of what Bill Ford’s trying to do in energy transition. And so everyone has good industrial logic to what we’re doing. Our pipeline, we won’t comment on it. We have a number of ideas that we’re executing right now and we feel comfortable that we will in due course execute some of those ideas.
Eric Luebchow: Great. Thank you, Marc.
Marc Ganzi: Thanks.
Operator: Our next question is from Matt Niknam with Deutsche Bank. Please proceed.
Matt Niknam: Hey, thanks so much for taking the question. One question, one housekeeping. On just the main question, you talked about obviously seeing early impacts of GenAI demand. Can you talk, Marc, maybe about how much data center leasing of late is tied directly to AI and when you may see this demand translating to more activity for your fiber and edge assets? And then on the housekeeping, I think there was reference in one of the footnotes around $40 million in catch-up fees this year. It appears it’s pure margin. I’m just wondering if that’s included in the guide for $335 million to $360 million in fee revenue for the year. Thanks.
Marc Ganzi: So first on catch-up fees, it’s normal nomenclature for our business that when a LP joins a fund late, we have the ability because it’s on committed capital. We have the ability to build those fees and we do so and Jacky and Tom and the team do a good job of doing that. The second question, can you repeat the second question again for Jacky and Tom’s benefit? Thanks.
Matt Niknam: Yeah, if it’s included in the $335 million to $360 million fee revenue guide.
Jacky Wu: Yeah, it is included. Yes.
Matt Niknam: Yeah, thank you.
Jacky Wu: And that’s consistent with our benchmark peers.
Marc Ganzi: And the first part of the question, sorry?
Matt Niknam: Yeah, first question was just on AI. So obviously you’re seeing it in data center leasing. Just wondering…
Marc Ganzi: Yeah, yeah. So what I would say is, if you look across a 5 gigawatt pipeline today, last year AI was about 20% of our pipeline. I would say today, AI workloads probably constitute and AI ecosystem, right? So whether it’s a CoreWeaver, or Nvidia, or an ARM or somebody like that, I’d say today it’s probably about 40% of our pipeline. And then as it relates to when it will impact fiber and edge, it’s already impacting fiber. I can tell you that. So we already are seeing data center connectivity demand that’s being driven by those AI workloads. And some of that is existing fiber conduit that we’re selling into. Some of that is new route architecture going into existing DigitalBridge data centers. And some of that is brand new de novo fiber that’s going to a data center that’s being self-performed by a customer.
So never before has it been more important to be close for our cloud and AI customers on the fiber side. And we’re pretty busy there. On the edge concept, we’ve actually been pretty clear. AI edge leasing is probably three to four years out, truth be told. I mean, right now we’re leasing into big language-based models that are pretty — a little less latency-sensitive is what I would say, but they’re more focused on power density and the delivery of big, big workloads. So think 400 megawatts, 800 megawatts, a gig of power. I mean, these initial language based models need to be — they don’t need to be in data center alley. They don’t need to be in the flap markets in Europe. They can be in other places. So with that less sensitivity, it does represent a good opportunity for us to build more fiber, but we’re also building some of those workloads for our customers.
So I think on the edge AI side or Generative AI edge, that’ll be something that’s probably more of like a, starting in ‘25, but really a ‘26, ‘27 and ‘28, kind of delivery story.
Matt Niknam: Great, thanks so much and congrats again on the quarter.
Jacky Wu: Thank you.
Marc Ganzi: Thank you. Thanks, Matt, appreciate it.
Operator: We have reached the end of our question-and-answer session. I would like to turn the floor back over to Marc Ganzi for closing comments.
Marc Ganzi: Well, first of all, thank you to all of you, our investors, for your continued patience and support of what we’re doing. We appreciate those of you in the last quarter that have joined our shareholder roster. We always appreciate new shareholders. And as we’ve made this transition and move into a new speaking circuit which starts today for us, we look forward to meeting with all of you and telling the story and giving you more visibility into what we’re doing. Really excited about our upcoming Investor Day. We’re looking forward. I hope all of you will take advantage of that. And again, the most important part of this call besides the results and the delivery is Jacky to my left here. I want to thank you, Jacky, for your partnership and friendship.
I’m excited about what you’re doing for us going forward. Jacky’s involved in a bunch of our portfolio companies, and he’s vital to the performance of those assets. And I know, Jacky’s excited to get back to his roots a little bit and be down in the weeds with the deal teams, which he likes. That’s something he’s quite passionate about. And so aligning his passion with where he can be really useful to DigitalBridge shareholders is exciting. And, Tom, welcome to the room. Welcome to the conversation. Looking forward to partnering with you and telling our new transform story. So, thank you. That concludes our comments and I look forward to seeing all of you out on the conference circuit. Take care. Have a great day.
Operator: Thank you. This will conclude our conference. You may disconnect your lines at this time and thank you for your participation.
