[New Position] VNET Group (VNET)

I’ve finally started a position in VNET Group.

If you read the deep dive I wrote with P14 Capital a few months back, you already know the story. I’m not going to rehash the whole thing here. But this is a company I’ve been watching and wanting to own for a while now and I finally freed up some capital to put behind it.

The Most Asymmetric Bet in China AI

It really comes down to one thing for me with VNET: AI compute demand in China is growing at a massive pace and it’s not going to slow down anytime soon.

ByteDance, Alibaba, Tencent, and Baidu are all spending like crazy on AI infrastructure, and every one of those chips needs somewhere to live. VNET is basically the landlord. I don't need to know which model wins or which chip wins. I just need the rent to keep getting paid.

For those who haven’t read my original write up and are unfamiliar with the name, VNET is the third-largest carrier-neutral data center operator in China and they run 50+ facilities across the country. When ByteDance or Alibaba or Tencent needs somewhere to park all the AI compute they’re buying, VNET is one of the companies they call.

The wholesale side of the business, which is where all the growth is, was up ~77% for the full year.