I Squared's Saragon buys 53MW of ex-Sprint switch sites and calls it an AI inference platform

I Squared Capital has launched a data center company called Saragon, backed by up to $1 billion in committed capital and seeded with ten facilities across nine US markets bought from Cogent earlier this year ^[1][2]. The seed portfolio carries roughly 53MW of installed power and 259,000 square feet of colocation space, which is a small number in a year of gigawatt announcements and a revealing one about where capital is now willing to go ^[4].

The sites are in Chicago, Atlanta, Phoenix, Los Angeles, Kansas City, Baltimore, Houston, Nashville and Stockton ^[3]. They were purpose-built in the 1980s and 1990s as switching sites for Sprint's legacy US long-haul fiber network ^[10]. After T-Mobile bought Sprint in 2020, the facilities and the network went to Cogent for $1 in 2022 ^[11]. Cogent then said it would convert around 100 of the switch sites into colocation, finishing the conversion earlier this year, before pivoting to sell or lease the largest 24 on a wholesale basis while retaining a slice of each for its own network ^[12][13].

That is the arbitrage. As of its most recent results, Cogent counted 185 data center and Edge facilities totaling more than 2.1 million square feet, 40,954 racks and 211MW ^[14]. Saragon's ten buildings represent about 25 percent of that installed power ^[1] at an average of 5.3MW per site against a Cogent portfolio average of roughly 1.1MW ^[2][3]. In other words, a fiber carrier sold the fat end of its own converted estate to an infrastructure fund and kept the thin end for network use ^[13][3].

Density is the pitch. Across 53MW and 259,000 square feet, the seed portfolio works out to about 205 watts per square foot ^[4], and Saragon says it aims to support high-density and liquid-cooled deployments plus interconnection-rich environments for AI inference, content delivery and hybrid cloud ^[5]. CEO Steve Orlando, who joins from Seaborn Networks after nearly six years running the Brazil-to-US Seabras-1 subsea system and earlier stints at Zayo, Level3, Verizon, MCI and Global Crossing, said demand for Edge capacity is accelerating across retail, enterprise and wholesale, and that AI inference is "the newest driver" of the same fundamentals behind content delivery and hybrid cloud ^[7][8]. That is a carrier resume, not a construction resume, and it matches the asset: buildings whose value is the fiber that already terminates in them.

The capital math says the seed is not the plan. Up to $1 billion against 53MW installed is roughly $19 million per existing megawatt ^[5], far more than anyone spends holding steady, and Saragon says it will scale through investment in the existing footprint, customer-led expansions and further acquisitions ^[6]. For I Squared, the $1 billion is about 1.7 percent of its $60 billion under management ^[9][6], added to a digital portfolio that already includes nLighten, BDx, Exa, Lightstorm, cell towers, Mexico's Kio and Brazil's Elea ^[9].

Watch whether the remaining wholesale-earmarked Cogent buildings find buyers on comparable terms, since Cogent flagged 24 of them and Saragon took ten facilities in total ^[13][2][7]. Watch, too, whether 5MW retrofits with liquid cooling actually book AI inference tenants, or whether the anchor demand stays content delivery and enterprise hybrid cloud ^[5][8]. The retrofit thesis only pays if power per building can rise inside walls poured for 1990s switching gear ^[10][4].