Glossary

Plain-English definitions of the technical and financial terms used in this book. Where a term has a defining example in the chapters, the example is given.

• AI factory. Jensen Huang's name for a data center built to train and run artificial-intelligence models, one giant computer to a building, whose product is tokens.
• Backlog. Revenue a company has signed contracts for but not yet delivered. Oracle and CoreWeave report it as remaining performance obligations. A backlog is a promise to pay, and it is only as good as the customer behind it.
• Behind-the-meter. Taking electricity directly from a power plant next door without passing it through the public grid. In 2024, FERC rejected an expanded behind-the-meter deal between Amazon and Talen's Susquehanna nuclear plant, over the question of who pays for the grid.
• Capacity auction. An annual auction in which a grid operator pays power plants to be available a few years in the future. PJM, the operator for 13 states and Washington, D.C., runs the best-known one. Its price, in dollars per megawatt-day, shows how tight the grid is.
• Capital spending. Money spent on long-lived assets such as buildings, power equipment and chips, also called capex. In the filings quoted in this book, it appears as purchases of property and equipment.
• Carrier hotel. A building, often an old telegraph, telephone or industrial building, where many network carriers rent space for their equipment and connect to one another. Also called a telecom hotel or telco hotel. 60 Hudson Street, 111 Eighth Avenue and One Wilshire are the classic examples.
• Chapter 11. The section of the U.S. Bankruptcy Code under which a company keeps operating while it reorganizes. Its creditors often end up owning the company that emerges. Under Chapter 7, by contrast, a company is usually liquidated.
• Cloud. Computing rented over a network, by the hour or by use, from a provider that owns or leases the data centers. Infrastructure as a service (IaaS) is the most basic form: renting raw computers and storage, as Amazon began doing with S3 and EC2 in 2006.
• Colocation. Renting space, power and cooling inside someone else's data center for your own equipment. Often shortened to colo, a nickname the Wall Street Journal explained to its readers in 1998.
• Credit default swap. A contract that pays out if a borrower defaults. Its price works as the market's measure of how risky a company's bonds are.
• Cross-connect. A physical cable between two tenants' equipment inside the same data center. It is the smallest product in the business and one of the most profitable.
• Data center. A building, or part of one, designed to house computers, with reliable power, backup generators and batteries, cooling, physical security and connections to outside networks.
• Depreciation. The accounting charge that spreads the cost of an asset over its useful life. Assume a longer life and the annual charge shrinks, which raises reported earnings. Whether a GPU lasts six years or two is one of the central arguments of the AI Boom.
• DIP financing. Debtor-in-possession financing: a loan made to a company while it is in Chapter 11, usually repaid ahead of the company's older debts.
• EBITDA. Earnings before interest, taxes, depreciation and amortization. Bandwidth called it Profitability. It measures the cash a business generates before paying for capital spending, interest and taxes.
• Enterprise Value. Market Value plus net debt: the price of the whole company, owed to shareholders and lenders together. Deal prices reported "including debt" are enterprise values.
• Facilities management. Running a customer's computer operations for it under a long contract, in the customer's building or the operator's. EDS and IBM built big businesses this way. Today it is usually called outsourcing.
• FFO and AFFO. Funds from operations and adjusted funds from operations, the profit measures REITs report in place of earnings. FFO adds depreciation back to net income. AFFO also subtracts the recurring capital spending needed to keep the buildings running.
• Gigawatt. A thousand megawatts, or a billion watts. A bit more than the output of the restarted reactor at Three Mile Island. In the AI era, single campuses are measured in gigawatts.
• Glass house. The industry's later name for the centralized, company-owned computer room of the mainframe era, with its raised floor, air-conditioning and guards.
• GPU. Graphics processing unit, a chip that does thousands of small calculations at once. Built for video games, it turned out to suit the training of neural networks, and Nvidia's GPUs became the scarcest commodity of the AI Boom.
• Hot site. A ready-to-use computer room kept empty for a customer whose own data center is destroyed. Comdisco and SunGard led the business in the 1980s. An empty shell, with space and no equipment, cost far less.
• Hyperscale. The largest buildings and campuses, built for or by the handful of cloud and AI companies and measured in tens or hundreds of megawatts, and now in gigawatts. The companies themselves are called hyperscalers.
• Interconnection. Connecting networks and customers to one another inside a building, through a shared switch or a cross-connect. Equinix built its business on it.
• Interconnection queue. The waiting line of power projects asking to connect to the grid. At the end of 2025, about 2,061 gigawatts were in the U.S. queue, and the median project took 61 months to get through it.
• Internet exchange point (IXP). A place where networks swap traffic, usually across a shared switch. MAE-East, MAE-West and PAIX were IXPs.
• MAE. Metropolitan Area Exchange, MFS's name for its Internet exchanges. MAE-East in Tysons Corner, Virginia, set up in 1992, and MAE-West in San Jose anchored the two coasts.
• Managed hosting. Running a customer's servers for it inside the host's data center, including the power, cooling, network and staff. Exodus, Savvis and Rackspace were managed-hosting companies.
• Market Value. The value of all of a company's shares, also called market capitalization or equity value. This book capitalizes it as a defined term, as Bandwidth did.
• Meet-me room. The room inside a carrier hotel where networks physically connect to one another. Zayo's zColo was the exclusive operator of the one at 60 Hudson Street.
• Megawatt. A million watts. Data centers are sized by the power they can deliver to their computers, and wholesale tenants often lease a megawatt or more. A kilowatt per rack, or per cabinet, measures how densely the computers are packed; the SuperNAP offered up to 17.2 kilowatts per cabinet in 2010.
• Network Access Point (NAP). The NSF's name for the four exchanges it designated in 1994 to carry traffic between commercial networks after NSFNET shut down. MFS Datanet ran the one in Washington.
• Off-balance-sheet financing. Borrowing through a separate vehicle so that the debt doesn't appear on the sponsoring company's balance sheet. Meta financed much of its Hyperion campus this way.
• Peering. Two networks agreeing to exchange traffic, originally without charging each other. UUNET began charging some of its peers in 1997.
• Perpetual capital. Money that doesn't have to be returned to investors on a fixed schedule, so it can hold an asset indefinitely. Blackstone used it to buy QTS.
• Powered shell. A building with its structure, utility power and connections in place, but without the cooling, generators and fit-out a tenant adds itself. It sits at the cheap end of wholesale.
• Power usage effectiveness (PUE). The total power a data center draws divided by the power its computers use. A PUE of 1.5 means half a watt of overhead for every watt of computing. Facebook's Prineville building reported 1.07.
• Public benefit corporation. A company whose charter names a public benefit that its directors are legally required to weigh alongside profit. Anthropic is one.
• Raised floor. The elevated floor of a computer room, with cables and cooled air running underneath. The phrase came to stand for data-center space itself.
• REIT. Real estate investment trust: a company that owns property and passes most of its rental income through to shareholders, in return for paying little corporate income tax. Digital Realty became the first data-center REIT in 2004.
• Retail colocation. Renting a cage or a few racks, buying power by the circuit and paying for cross-connects to other tenants. Equinix is the archetype.
• Round-tripping. Two companies selling each other capacity mainly to inflate both sides' revenue. Bandwidth told how Global Crossing and Qwest did it, and at Qwest it was part of a fraud.
• Sale-leaseback. Selling a property and immediately leasing it back, to raise cash while keeping the use of the building. Savvis sold several former Exodus data centers to Du Pont Fabros Interests this way in 2004.
• Section 363 sale. A sale of a bankrupt company's assets, usually by auction, under that section of the Bankruptcy Code. Savvis won the remains of Exodus in one.
• Small modular reactor (SMR). A nuclear reactor smaller than a conventional plant, designed to be built in a factory and installed in units. Google and Amazon signed deals for them in 2024, none yet built.
• Take-private. The purchase of a public company by private investors, which removes its shares from the stock market. Between 2021 and 2022, QTS, CyrusOne and Switch were taken private.
• Time-sharing. Dividing one large computer among many users at once, each typing at a terminal over a phone line and paying by the hour. The business model of Tymshare and GE in the 1960s, and of the cloud 40 years later.
• Tokens. The small chunks of text an AI model reads and writes. AI services are often priced by the token.
• Training and inference. The two jobs of an AI data center. Training builds a model by running enormous amounts of data through it; inference runs the finished model to answer users' requests.
• Wholesale colocation. Leasing a large block of space with its own dedicated power, often a megawatt or more, to one tenant for several years. DuPont Fabros was the archetype.