Phoenix data center firm raises $1B to repurpose older facilities amid construction backlash

Article originally posted on Phoenix Business Journal on September 3, 2026

A new Phoenix-based data center company has begun acquiring data center facilities across the nation and repurposing them in preparation of what its leaders call a “fundamental shift” in digital infrastructure.

Saragon, established by Miami-based private equity firm I Squared Capital after an acquisition of 10 data center facilities from Cogent Fiber LLC, is planning on using these older facilities for “edge capacity” and “AI inference.”

This means the focus will be on the real-world deployment of AI computing closer to population centers, something that becomes more essential as a growing share of computing demand moves towards end users.

I Squared Capital committed up to $1 billion to back the operation.

The $1 billion venture comes amid a nationwide wave of pushback against data center development, with opponents deriding the facilities for their heavy use of power and water, as well as the relatively few jobs created by data centers after construction is complete.

Saragon’s strategy stands out because it seeks to use preexisting data centers rather than construct news ones.

That includes in Phoenix, where an entity affiliated with I Squared Capital in July purchased a 183,715-square-foot data center at 1530 E. Roeser Rd. for $8.3 million, according to Maricopa County records.

Saragon confirmed with the Phoenix Business Journal that this facility will also serve as its company headquarters. The company is led by CEO Steve Orlando, who spent nearly six years as CEO of the operator of Seabras-1, the subsea cable system connecting Brazil and the United States.

Saragon expects to hire 160 to 180 employees companywide by the end of 2027, with about 50 to 60 employees based at the Phoenix headquarters.

Orlando expressed excitement in bringing the company headquarters to Arizona.

“We couldn’t be happier and prouder of an opportunity to headquarter in the state of Arizona, especially in the Phoenix-Scottsdale area … we’re excited to bring jobs to the state, and tap into this next generation of kids coming out of college, and the younger workforce that’s out there in today’s environment,” Orlando said.

How Saragon’s data center strategy will work

Orlando told Phoenix Business Journal that their data centers are different from typical new data centers in that they operate on a smaller scale and support the infrastructure of local communities.

“Our strategy we do think is unique. We truly believe that there is an opportunity in the space below, lets say 15 megawatts of power for a facility, that’s an uncovered market,” Orlando said.

Orlando pointed out that in Arizona many of the large data center developments are 50 megawatts or above. Saragon’s main focus will be plugging “underserved” local markets into the digital infrastructure world.

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