# Colocation Colocation is the business of providing space, power, cooling, and connectivity to customers who bring their own computing equipment. The operator runs the building; the customer runs the machines. It is the layer that lets an operator place compute where power is available without becoming a construction company. > [!note] The one-sentence version > Somebody else builds the substation, the chillers and the shell; you bring the racks. ## The division of responsibility The facility operator supplies the shell, [[wiki/Utility Interconnection|utility service]], [[wiki/Electrical Supply and Reliability|redundant power]], [[wiki/Data Center Cooling|cooling]] to a specified capacity and temperature, physical security, fire protection, and carrier access. The customer supplies racks, servers, networking, and operating staff, and takes responsibility for everything inside its cage or suite. Contracts specify power capacity in kilowatts or megawatts rather than floor area, since power is the scarce quantity, along with availability commitments, cooling temperatures, and increasingly the liquid-cooling service a dense deployment requires: supply water temperature, flow, and the facility-side connection at which the customer's loop terminates. ## The forms **Retail colocation** sells cabinets or cages within a shared hall, with interconnection to many carriers and other tenants; the value is the density of connections available. **Wholesale colocation** sells a dedicated hall or building with its own power and cooling infrastructure, which is the form specialist and hyperscale operators use to add capacity quickly. **Interconnection-oriented facilities** exist principally as meeting places for networks, where the connectivity rather than the space is the product. ## Why it matters in this buildout Compute follows power, and power is available in specific places at specific times; see [[wiki/Data Center Siting|Data Center Siting]] and [[wiki/Interconnection Queue|Interconnection Queue]]. A colocation operator that has already secured interconnection, built the shell, and energized the plant is selling the scarcest commodity in the industry: capacity that exists now. For an operator whose own construction pipeline is measured in years, taking space in an existing facility converts a construction schedule into a procurement decision, which is why specialist and hyperscale operators both deploy substantial capacity in third-party space alongside their own. The pattern also distributes the buildout geographically, since colocation capacity exists in many more places than any single operator would build. ## Relationships - **supplies:** [[wiki/Electrical Supply and Reliability|Electrical Supply and Reliability]] · [[wiki/Data Center Cooling|Data Center Cooling]] · [[wiki/Fiber Route Diversity|Fiber Route Diversity]] - **hosts:** [[wiki/Bare Metal Compute|Bare Metal Compute]] · [[wiki/Neocloud|Neocloud]] · [[wiki/Hyperscaler|Hyperscaler]] - **shortens:** [[wiki/Construction Sequencing|Construction Sequencing]] · [[wiki/Interconnection Queue|Interconnection Queue]] exposure - **part of:** [[wiki/Cloud Deployment|Cloud Deployment]] - **source articles:** [[articles/Vertically Integrating an AI Superpower from AI Factory to Citizen|Vertically Integrating an AI Superpower from AI Factory to Citizen]] · [[articles/The Gigawatt Is the New Measure of War|The Gigawatt Is the New Measure of War]] - **collection route:** [[collections/American Infrastructure|American Infrastructure]] · [[collections/American|American Collection]] ## Evidence posture - **Established:** the division of responsibility between facility operator and equipment owner; contracting by power capacity rather than floor area; liquid-cooling service terms specifying supply temperature, flow, and the facility-side connection point; the retail, wholesale, and interconnection-oriented forms. - **Established (datestamped):** as of October 2026, specialist and hyperscale operators both deploy substantial capacity in third-party colocation space alongside self-operated facilities, including deployments in which the facility partner supplies infrastructure and the compute operator deploys and manages its own platform. ## Sources - Colocation market practice and facility service-level contracting, as current October 2026.