Bell plans to build a major new data centre near Regina for neoclouds Cerebras and CoreWeave, as the telecom giant doubles down on the AI boom.

The firm expects to spend about $1.7 billion in capital expenditures on the facility in Sherwood, Sask., which will have a power capacity of 300 megawatts. Bell will begin construction on the data centre in the spring, and aims to bring the first phase online in the first half of next year. It expects the project to be a significant money maker, boosting its target for revenue generated from selling AI tools and services in 2028 to $2 billion, up from the $1.5-billion goal it set last October.

“There’s significant momentum,” Bell CEO Mirko Bibic told The Logic. 

The new data centre is likely to be one of the largest in Canada when it’s fully up and running, and could be the first of a new wave of mega-facilities purpose-built for AI proposed by both upstarts like Beacon and Crusoe, and longstanding developers like eStruxture.

As domestic consumer telecom growth slows, Bell has bet big on the business-focused AI market. Last May, the firm announced an initial six new data centres in British Columbia with a combined 500 megawatts in capacity. Bell builds the facilities, secures power, connects them to its fibre networks, and protects them from cyber attacks. It then rents space in the data centres to cloud providers, public-sector organizations and large companies.

Bell has enlisted Montreal-based Hypertec to supply some of the equipment for the facilities. Bell also recently signed deals with Canadian firms Cohere and Coveo under which its Ateko tech consulting unit will resell their AI tools to clients, with a particular focus on government departments and companies in regulated industries.

Bell is taking “a demand-led approach” to the AI data-centre business, Bibic said. “Build when we have a contract, not ‘build and they will come.’” The firm expects it can sell 373 megawatts worth of capacity through 2028, up from 73 megawatts last October.

It’s also reducing risk by not buying AI chips, which cost a lot and can quickly become obsolete. Instead, Bell is renting to or partnering with companies that bring their own hardware. Cerebras will be one of the anchor tenants at the new Sherwood data centre, taking up 160 megawatts of capacity. 

The Sunnyvale, Calif.-headquartered firm has developed large chips that are particularly good at inference, the industry term for running AI models and applications. The firm also has a large staff in Toronto, which writes much of the software that controls its hardware. In addition to selling its chips to tech firms, Cerebras operates its own cloud service. Last March, the firm announced that its processors would power Enovum Data Centres’ Montreal facility. 

This year, Cerebras has clinched deals to supply 750 megawatts worth of inference to OpenAI, and for Amazon Web Services to use its chips. Bell could also sell some of the processing power Cerebras will generate at the Sherwood data centre to government and business clients, said Bell spokesperson Adam Austen. 

CoreWeave, headquartered in Livingston, N.J., will rent the other 140 megawatts of capacity at the Sherwood facility. The firm employs Nvidia’s graphics processing units, for clients like Microsoft and OpenAI. CoreWeave came across the border last year, opening a data centre in Cambridge, Ont., with Cohere as its main user, backed by federal funding. 

Bibic said Bell is looking for data-centre tenants that are “well-capitalized and at the epicenter of AI deployment.” Neoclouds fit the bill, but they can be volatile. CoreWeave’s stock has swung on AI bubble fears. Bay Area-based Groq—the anchor tenant of Bell’s first AI data centre—effectively sold to Nvidia in December. 

Bell has negotiated long-term commitments and upfront payments from tenants, reducing its risk, Bibic said. Still, he fully expects the capacity to get used. “There’s going to be significant, continued demand for that underlying AI infrastructure to fulfill the promise of AI,” he said.

On Monday, Bell also updated its financial outlook to include the Sherwood facility, increasing its projected revenue compound annual growth rate from 2025 to 2028 to between 2.5 and 4.5 per cent, up 0.5 percentage points. It expects earnings growth a full percentage point higher, at three to four per cent.  

Neighbouring Alberta has made a big push to attract data centres, and landed many of the biggest projects planned or proposed in Canada to date. But Saskatchewan made a concerted effort to land Bell, according to Bibic. The provincial government “sees the importance of investing in AI,” he said. While the data centre won’t receive direct public funding, Crown corporations are playing key roles—SaskPower by allocating the energy, and SaskTel by building fibre lines from the site to Bell’s existing network.

Bell is touting the benefits it claims the project will bring to the local community, including employing 800 people in engineering and the trades during construction, and 80 full-time staff once it’s running at capacity. The firm is looking to redirect some of the heat the data centre generates to warm the neighbouring campuses of the University of Regina and Saskatchewan Polytechnic, as well as a proposed housing development of the George Gordon First Nation. 

Bell is also promising not to draw on municipal water to cool hardware in the facility—a concern raised by some residents after the CBC first reported on the firm’s plans last month. Some residents in Olds, Alta., and Lorneville, N.B., have strongly opposed AI infrastructure projects in their communities due to worries over resources and noise. Bibic said Bell is conscious of local concerns as it plots out its data-centre strategy.