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Beyond Efficiency: Driving Revenue Through Datacenters

For many years, datacenters were simply seen as an unavoidable cost of doing business. They were expensive, consumed huge amounts of power, and came with significant operational complexity. This perception is now starting to change thanks to the integration of agentic AI. Where datacenters are quickly evolving into valuable assets that drive profitability and unlock entirely new streams of efficiency and revenue.

The growing adoption of agentic AI systems that can reason, learn, and act independently with very little human guidance is fundamentally reshaping how datacenters are managed and perceived. From predictive maintenance to seamless orchestration of customer-facing systems, AI is turning datacenters from overhead into core assets that protect and enhance profitability. This shift is particularly noteworthy among investors and operators, where the transition stands out as one of the most underappreciated developments linked to the broader boom.

Microsoft’s approach highlights the transformative effect of AI in the data center space. Leveraging intelligent monitoring and sophisticated anomaly detection, Microsoft succeeded in reducing its IT support costs by 20 percent and improving system uptime by 15 percent. This pairing delivers direct value to the business, a significant reduction in ongoing operating expenses together with increased service reliability.

In a market dominated by cloud-based economics, uptime is not just a measure of technical performance, it is key to preserving revenue. Every incremental point of uptime translates into sustained subscription revenue, lower customer churn, and fewer costly service credits. In businesses that depend heavily on datacenter infrastructure, the ability to use automation to improve resilience has become a major lever for expanding margins.

While gains in operational efficiency are substantial, they only tell part of the story. Consider AT&T, which offers a compelling case of the datacenter’s value beyond simple cost savings. By marrying multimodal AI orchestration with edge computing, AT&T cut operational expenses by 15 percent and simultaneously raised the effectiveness of personalized upselling opportunities at the customer level.

This shift marks a major turning point: datacenters enabled by AI are moving beyond keeping the network running. They are evolving into critical layers for customer engagement and direct revenue generation. When the infrastructure itself can tailor real-time offers to end users, the datacenter becomes a genuine sales enablement tool, not just a background utility.

The Big Picture

For investors the lesson is increasingly clear: datacenters powered by AI are monetizable assets. In a region where enterprise software and infrastructure startups set the pace, competitive advantage will accrue to those who reimagine the datacenter as a driver of margins instead of a fixed cost.

For AI-native companies, the evolution of datacenters is more than just a new avenue for revenue growth, it has become an essential requirement for remaining competitive. As the landscape accelerates, the ability to seamlessly embed advanced AI into core infrastructure is no longer a differentiator but a baseline expectation. Operating with datacenters that are not deeply optimized for agentic AI puts organizations at a disadvantage, risking slower innovation cycles and weaker customer outcomes. This reality has transformed datacenter modernization into a high-stakes arms race, where fewer can stay ahead in an increasingly crowded and sophisticated field.

AI’s promise is often expressed in trillion-dollar headlines, but it is at the datacenter level that this potential becomes reality. The results from Microsoft, AT&T, and Salesforce ranging from double-digit cost savings to measurable increases in revenue are real and happening today, not just theoretical.

As datacenter systems progress from copilot to genuine autopilot, their economic contribution will fundamentally reshape the margin profile of the entire sector. What was once seen as a drag on profits is becoming the most important lever for expanding them.

StepSF // August 21

This week, Bill Barry moderated a panel on "Architecting Systems to Accelerate U.S. AI Dominance: Infrastructure, Talent, and Energy." The discussion brought together industry leaders including Val Bercovici (WEKA), Lari Hämäläinen (McKinsey & Co.), Ibrahim AlSuwaidi (DCM Ventures), and Syed Natif Nawaz (Aurum), each sharing insights on what it will truly take for the U.S. to lead in the age of agentic and genAI.

Beyond the expected challenges around infrastructure and sustainable energy, a particularly compelling point was raised by Val Bercovici: the growing inequity in AI access, coining the term “Universal Basic Token,” advocating for a future where advanced AI capabilities aren’t restricted to premium users. This resontes, especially considering the wider gaps in AI adoption in emerging markets—a reminder of the urgent need for data sovereignty and local data centers to enable more inclusive and commercially viable AI growth worldwide.

The panel highlighted that achieving genuine AI dominance isn’t just about building faster or greener data centers; it’s about creating an ecosystem where innovation, sustainability, and access go hand in hand. As we architect the next wave of AI infrastructure, prioritizing equity of access must be central to ensure that AI becomes an engine for broad-based economic growth, not just a select few.

Upcoming Events

BA Startups Collectively Secured $926M this week

More fundings but for smaller rounds marked Bay Area funding that totaled $926M this week and took August-to-date to $3.64B. The biggest funding of the week was in biotech (Kriya Therapeutics), followed by Nuro (robotics).

IPO Watch: As we move towards and into September, expect to see additional IPO filings (like Netskope's today). And SPACs (aka blank check companies) are having a resurgence, underlined by Chamath Palihapitiya's American Exceptionalism Acquisition Corp.'s $250M IPO. As a group, SPACs have fared poorly because companies that simply were not IPO-ready were able to enter the public market via merger with one of these blank check companies and not surprisingly subsequently floundered or failed (e.g. Momentus, 23andme).

Webinar - "Fundraising - Finding investors on LinkSV (plus advisors, partners, leads and more)"

this Wednesday, August 27 @4PM. Join Bob Karr and Dawn DeBruyn Novarina for a dive into the LinkSV database. With thousands of companies, fundings and investors – VC, corporate, angel – you can find those who have funded companies in your space and may be interested in helping you. And we'll share fundraising tips and answer any questions you have in this interactive session. Registration here: https://us02web.zoom.us/meeting/register/JiUySM0UQx6zWKex3VAv8A

Startups raising capital: The Pulse of the Valley weekday newsletter keeps you current with the startups that are getting funded and who's investing in them – and not just the big, high profile deals. We also surface the 50% of early stage fundings that close quietly and never hit the press. Details include investor and executive connections and contact information. Founders get the full $50/month package for just $7/month with LinkSV's Entrepreneur membership, check it out here.

Follow us on LinkedIn to stay on top of what's happening in 2025 in startup fundings, M&A and IPOs, VC fundraising plus new executive hires & investor moves.

Early Stage:

• TinyFish closed a $47M Series A, develops and operates Enterprise Web Agents for global businesses.

• Casca closed a $29M Series A, accelerates the loan application and origination process using responsible AI.

• Firecrawl closed a $14.5M Series A, the web data toolkit for AI, a full suite of tools for crawling, searching, and extracting web data that empowers users to transform the open web into clean, structured, machine-readable content.

• VibeCode closed a $9.4M Seed, an app that builds mobile apps.

• Convoke closed a $8.6M Seed, the AI-native operating system for biopharma companies, offering software tools that unify internal and external data, codify decision logic, and generate critical deliverables across the drug lifecycle,

Growth Stage:

• Kriya Therapeutics closed a $313M Series D, a biopharmaceutical company developing gene therapies to address chronic diseases.

• Nuro closed a $97M Series E, an American self-driving technology company on a mission to make autonomy accessible to all through the world’s most scalable driver, combining cutting-edge AI with automotive-grade hardware.

• Upstage AI closed a $45M Series B, building the future of enterprise AI through domain-specific language models and intelligent tools designed for high-impact business use.

• Medallion closed a $43M Series D, the leading provider network management platform that unites provider operations and empowers end-to-end automation for credentialing, enrollment, and monitoring.

• Functionize closed a $41M Series B, an AI-powered platform used for the intelligent creation of software test cases.

Blue Whale Investment Club | Private Access to AI & Frontier Tech

BWIC is a global members club and advisory platform connecting family offices, LPs, and technologists to exclusive opportunities in AI, quantum, and life sciences.

What They Offer

• Curated investment memos & sector briefs

• Flexible SPVs/SPCs for participation

• Private roundtables & global events

• Ecosystem access via IgniteGTM

Why It’s Different

No long lockups—BWIC gives members liquidity, speed, and insider access to AI infrastructure before mainstream visibility.

Highlights

• Membership spanning Silicon Valley, London, Abu Dhabi, Singapore

• Hosted AI Infra Summit 4 & InfraSocial with global investors and founders

• Recognized as an AI-first investment platform

📧 [email protected] | 🌐 bluewhale.ventures

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