Digital Realty (NYSE: DLR) is an Austin-based real estate investment trust that owns the physical buildings behind cloud computing and AI. Founded in 2004, it ended 2025 with 310 data centers, about 57.6 million rentable square feet and $6.11 billion of revenue.
How Digital Realty makes money
The company leases space, power and cooling. Hyperscale customers such as major cloud platforms rent entire halls or buildings by the megawatt on multi-year leases. Enterprises, carriers and service providers rent cabinets and cages in network-dense colocation sites, and every customer can buy cross-connects and ServiceFabric links to clouds and partners. Most utility power is passed through to tenants, which steadies margins.
Interconnection and the Equinix rivalry
Acquisitions of Telx in 2015 and Interxion in 2020 gave Digital Realty carrier-dense campuses where hundreds of networks meet. That moved it closer to Equinix, its main public rival, which built its business on retail colocation and interconnection. Digital Realty still leans more toward large wholesale deployments, but its 0-1 MW and interconnection category signed a record $108 million of annualized rent in Q2 2026.
The AI leasing boom
AI clusters need far more power and cooling per rack than traditional servers. Digital Realty signed its largest-ever lease, a 200 MW hyperscale AI deployment in Charlotte, in Q1 2026. Q2 2026 revenue rose 29% year over year to $1.92 billion, renewal rents rose 25.4% on a cash basis and backlog reached a record $1.9 billion. Management raised 2026 guidance to $6.85-$6.95 billion of revenue and $8.15-$8.20 of Core FFO per share.
Risks to watch
Power is the bottleneck. Grid connection delays, long lead times for transformers and switchgear, and local resistance to large campuses can slow deliveries. The business is also capital-hungry, which is why Digital Realty funds much of its development with partners such as Blackstone.
