Blue Owl Seizes the Southeast Subsea Advantage: How the South Reach Networks Deal Positions Investors for the AI Infrastructure Boom

The acquisition of South Reach Networks (SRN) by Blue Owl Capital's Digital Infrastructure strategy in July 2025 marks a pivotal move to capitalize on the surging demand for high-capacity data infrastructure. By securing SRN's Florida-based fiber network and subsea cable assets, Blue Owl has established a beachhead in a critical geographic hub for global data traffic. This strategic play aligns seamlessly with the exponential growth in bandwidth requirements driven by AI, hyperscale cloud adoption, and edge computing.

The Southeast's Rise as a Subsea Superhighway

Florida's geographic position as a gateway between the U.S., Latin America, and the Caribbean makes it a linchpin for international data flows. SRN's network, which connects 40 data centers, colocation facilities, and subsea landing stations, provides Blue Owl direct access to these vital nodes. This proximity to subsea cables—such as the Americas Region Caribbean Ring (ARCR) and the Maya Submarine Cable System—enables Blue Owl to serve hyperscalers like Amazon, Microsoft, and Google, which rely on low-latency, high-capacity routes for global data transmission.

The strategic value of Florida's subsea infrastructure is underscored by . While the broader sector has seen modest gains, Blue Owl's shares have outperformed, reflecting investor confidence in its infrastructure thesis.

Expanding the Fiber Footprint: Fueling AI and Edge Computing Demands

SRN's 370-mile fiber network stretching from Jacksonville to Miami is just the starting point. Blue Owl's pledge of “significant capital” to expand this corridor “beyond” its current scope targets a market ripe for growth. AI training and edge computing require ultra-low-latency connections to process data closer to end-users, a capability SRN's edge facilities—five of which are colocation hubs—already provide.

The acquisition also absorbs SRN's prior expansion via Resurgence Infrastructure Group, adding 120,000 fiber miles and five neutral colocation facilities. This scale positions Blue Owl to meet the hyperscalers' insatiable demand for scalable, redundant infrastructure. As AI models grow in complexity, the need for dense fiber networks to support data center interconnectivity will only intensify.

Operational Synergies: Scott Bergs' Dual Leadership

The appointment of DF&I CEO Scott Bergs to oversee both SRN and DF&I signals a deliberate integration strategy. By combining DF&I's East Coast fiber assets with SRN's Florida subsea prowess, Blue Owl can offer end-to-end connectivity from Virginia's data center clusters to Caribbean and Latin American markets. This synergy reduces redundancy and creates a unified platform to negotiate with hyperscalers seeking holistic infrastructure solutions.

The operational efficiency gains here are material. A single leadership team can standardize maintenance, pricing, and customer support across both portfolios, while leveraging shared resources to reduce overhead. This consolidation is a stark contrast to fragmented regional players, giving Blue Owl a competitive edge.

The Investment Case: Risk-Adjusted Returns in Digital Infrastructure

Digital infrastructure is a recession-resistant sector, with hyperscalers' spending on data centers and connectivity expected to grow at 8–10% annually through 2030. Blue Owl's $7 billion Digital Infrastructure Fund III, which backs this acquisition, is primed to benefit from this tailwind.

The Southeast's role as a subsea cable hub and gateway to emerging markets adds geopolitical resilience. Unlike landlocked data hubs, Florida's assets are insulated from supply chain bottlenecks and geopolitical tensions in other regions. Meanwhile, highlights the premium investors assign to companies with subsea and edge infrastructure exposure.

Key Risks and Considerations

While the acquisition is compelling, investors should monitor execution risks. Expanding SRN's network into underserved regions will require regulatory approvals and capital discipline. Additionally, competition from telecom giants like AT&T and Verizon, which are also doubling down on fiber and edge infrastructure, could pressure pricing.

Final Take: A Strategic Bet on the Future of Data

Blue Owl's move into Florida's subsea ecosystem is no accident—it's a calculated play to corner a market critical to the AI and edge computing eras. With hyperscalers doubling their data center capacity every four years, the demand for low-latency, high-capacity infrastructure is all but guaranteed.

For investors, Blue Owl's SRN acquisition offers exposure to a sector with strong cash flows, minimal cyclicality, and a clear growth trajectory. While the stock isn't without risks, the combination of Florida's strategic location, Scott Bergs' operational expertise, and the hyperscalers' insatiable bandwidth needs positions this as a compelling risk-adjusted opportunity. In a world where data is the new oil, Blue Owl has just struck a gusher.