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On Monday, 11 August 2025, American Tower (NYSE:PRO) participated in the KeyBanc Capital Markets Technology Leadership Forum, where CTO Ed Knapp outlined the company’s strategic focus on edge computing and wireless technology evolution. While expressing optimism about future opportunities, Knapp also acknowledged challenges like the slower-than-expected 5G rollout.
Key Takeaways
- American Tower is investing in edge computing with a focus on high-power density and modular data centers.
- The company views satellite connectivity as complementary to existing tower infrastructure.
- Upcoming spectrum auctions are crucial for American Tower’s strategy, particularly for the upper C band.
- AI and 6G are seen as transformative forces for telecommunications and data centers.
- The company is leveraging AI to optimize operations and improve network efficiency.
Edge Computing Strategy
- Evolution of Edge Facilities:
- Initial facilities in Jacksonville, Austin, Denver, Pittsburgh, and Atlanta faced limited demand.
- Shift towards modular data centers and high-power density solutions.
- Power Focus:
- Power constraints in centralized locations are driving demand for edge solutions.
- Raleigh data center offers modular increments of 1 MW with high power density.
- Scale and Economics:
- Focus on anchor customers and strategic locations.
- Modular facilities are built within 12-18 months, faster than traditional large-scale centers.
Satellite Connectivity and Spectrum Strategy
- Complementary Technology:
- Satellite-to-cellular connectivity enhances coverage and network resilience.
- Investment in AST SpaceMobile to fill coverage gaps.
- Spectrum Strategy:
- Collaborating with operators for low-band spectrum access.
- Pursuing MSS spectrum and preparing for upcoming auctions.
Future Outlook
- Spectrum Auctions:
- Anticipation of FCC auctions for key bands like the upper C band.
- Spectrum essential for new technology deployments and network densification.
- 5G and 6G:
- 5G rollout has been slower than expected, but new tax incentives may accelerate progress.
- 6G integration envisioned to merge telecommunications and computing at the edge.
Conclusion
For a detailed understanding, readers are encouraged to refer to the full conference call transcript.
Full transcript - KeyBanc Capital Markets Technology Leadership Forum:
Brandon Nispel, Analyst, KeyBank: Good morning everybody my name is Brandon Nispel welcome to the KeyBank Technology Leadership Forum. I cover comp services for KeyBank and towers data centers and such. Super happy to have Ed Knapp CTO of American Tower with us. Is your eighth year at the conference.
Ed Knapp, CTO, American Tower: Eighth presentation I think too.
Brandon Nispel, Analyst, KeyBank: Yeah. Maybe just help us understand you know what’s your role, what’s your function as CTO at American Tower.
Ed Knapp, CTO, American Tower: Thanks, Brandon. It’s great to be here. Brand new venue, so really I think everyone is appreciating that. At American Tower, I joined eight years ago to try to help them get more technical in the sense to bridge the gap with just towers being a passive business to looking at additional extensions of those towers. And some of the areas I’ve worked on and we’ve been successful in is data centers, for example.
So we purchased CoreSight in 2021, and that’s a big part of our capital plan now. Another part of it, is satellite. So we invested in AST Space Mobile. I sit on the board there, and, we’re seeing the convergence of satellite and terrestrial networks. Other areas, power as a service is something that we do in Africa out of necessity.
But if you think about how we need to transform, the data centers already do space power cooling, but tower business really never got into the power part of it. And as we look at pushing more and more virtualized platforms out to the tower, it’s going to look like small data centers. And we’ve been doing a lot of work on the edge, so that’s a big part of my remit. We’ve dabbled in fiber, done a bunch of other things with our assets, but for the most part, that’s what I focus on. And six gs, of course, is the future technology that we can get into.
Brandon Nispel, Analyst, KeyBank: Let’s talk about the intersection of sort of towers and data centers maybe to start. You know American Tower acquired CoreSite what three three four years ago. At the time there was a view and like strong conviction that the edge would play out in terms of towers and data centers being sort of converged infrastructure. I think companies admitted that that thesis hasn’t played out as quick as you might have liked. What keeps you convicted that that’s sort of a thesis that you can continue to pursue?
Ed Knapp, CTO, American Tower: Well, I think it has moved to the right compared to what maybe people thought, but I do believe just from being here and you hear a lot of the work people are doing, for example, with AgenTic AI, the movement from a lot of training into production to models that would be more inferencing. You could talk about them being on prem but the power consumption says they need to be in a more, let’s call it, comprehensive facility. And so we have been working on a Raleigh data center for the last let’s say, year and a half, two years to try to prove that concept. Part of it is we have CoreSite, so we know the data center business really well now when we look at it as, let’s say, campus like colocation facilities with large interconnection. So the thesis was that that will distribute.
Right? At some point, you need to look at bringing more and more peering points closer to the edge, and you need to look at how is, the wireless and wireline networks gonna converge. And that we see that, in fact, previous speakers talked about that today, that the wireless network has been a thin pipe and is getting bigger with five g and ultimately with six g. That’s gonna drive a lot more data, and that data gravity is gonna say things need to happen at the edge. So it’s going be a longer journey than I think most people would have liked, but the reality is I still believe with conviction that we’re going to see more distributed compute.
We’re starting to see customers excited about what we’re doing in Raleigh, and that trend will continue. And we’re in a great position because we have the hyperscalers and the colocation facilities essentially the wireline side of the business. We have all the MNOs and the towers on the wireless side of the business and we’re at the center of that convergence.
Brandon Nispel, Analyst, KeyBank: So talk about sort of in the last three years what type of progress you’ve made in terms of establishing these edge facilities. You talked about Raleigh. How many relocations you have? Where do you see that going over the next three to four years?
Ed Knapp, CTO, American Tower: So early on, we had a couple even before Coresight, we started dabbling in edge. There were some misconceptions by certain players in the industry that you would just magically put a a shelter at the base of a tower and the traffic would break out. Even today, we’re still not at five g with SA where you can break out the traffic everywhere you’d like in a more efficient way. Most of that traffic always got backhauled to the mobile core. And so early on, we we dabbled in trying to place small facilities on the order of 100 kilowatts, 10 racks believing that communities would look at those as local data centers.
We did one in Jacksonville, we did one in Austin, we did two near Denver, we did one in Pittsburgh, and one near Atlanta. And we also bought our facility before CoreSite called Colo ATL, was a meet me type room. And we learned a lot from the fact that nobody wanted to be in those sites at the level we thought. They were small, and the persons and and players we were working with thought that they would fill up and become localized, out outsourced from on prem for small medium businesses. And there was some demand, but not enough to really justify it.
But we made really small investments, and we learned a lot about what not to do given the overhead of how many racks you can sell, what the price points would be. And then we sort of doubled down after we we bought CoreSite learning what we know about how to operate their how they operate their business, how great they run, from a customer perspective, the overall colo market and where the trends were, originally, everybody was focused on latency. That never played out. It’s going to, but it’s still one of those things at the long term. Then it was data gravity, and we never got a lot of that heavy data, which we’re starting to see transform on the uplink and more balance between downlink and uplink traffic, especially as it start to move to more sensors and and video.
But the thing that’s driving it now is power. Right? Power is getting constrained in a lot of these centralized locations. And so that’s saying, where can you find power to distribute out to the edge? So when we built Raleigh, we said, look, we’re not gonna build 10 when we do CoreSite, we build sort of on the order of anywhere from 10 to 30 megawatt type of facility, and we have a campus where we can interconnect them with fiber.
When we look at Raleigh, what we did is we looked at something on the order of five megawatts or less. And in this case, we deploy them as modular increments of one megawatt. So the first megawatt is out there. It’s being sold, and there are a number of different types of customers that are interested in that, bare metal services, GPU as a service companies, the optical companies that are local access networks want to be in there. And that’s bringing even some local enterprises who think of saying, can you get me higher power density, which is our second drop of modular?
We can add liquid cooling. I’m going do that faster than a lot of the retrofits that are going today in the largest scale facilities. So we’re seeing this need through power as almost being the entry point. And then once you can get to scale, you’ll start to see that next phase of not just the data gravity part but the latency part kick in.
Brandon Nispel, Analyst, KeyBank: So I wanted to ask, I mean, I think we hear headlines of all the big numbers of megawatts and gigawatts even being built. These are smaller facilities. Also, you know, telcos have a lot of central offices with probably in the range of five megawatts type of power. What do you see ultimately as like the driving force to get customers and what’s like the inflection point around like really establishing that business?
Ed Knapp, CTO, American Tower: Well, today, I think in the last, let’s say, two years or so, the 100 gigawatt data center in largely interconnected GPUs, that that trend is going to continue as far as CapEx will drive it. Right? And people need to have that. And that’s not our business. Right?
That’s not what we do. But we do need to interconnect to those facilities, and we do that through our cloud interconnection. So in CoreSite, we have the ability to sort of handle those 100 megawatt to gigawatt plus facilities through our relationship with the with the hyperscalers. But more importantly, the question is what happens next? When you start looking at transformation, we heard a lot even this morning’s panel about where AI is, agentic AI, production of real tools that that take advantage of LLMs and even small language models to really transform businesses.
We’re still in the early stages, and frankly, a lot of large companies are worried because it’s moving so fast. Do I do I put money in? And then it’s obsolete? So at the edge, you kinda have an opportunity to experiment without building out a major facility on prem. If you don’t have them today, you’re not gonna have, let’s call it, tens of kilowatts of rack power density available to you.
Right? Maybe you had a couple kilowatts when it was old CPUs and you’re running Dell and HP servers. Now you gotta run something that’s a much more substantial, platform. And you don’t wanna do it, also on your own. You could share it.
Right? So some of these folks believe that that investment, while it’s moving so fast, it’s not worth it. Let’s just rent it. And we can do that locally where we have tech companies in the Raleigh area, two of them, that are saying, we need to run it for, for example, managing networks. This is networks that are in the service provider place that they actually have equipment that they’re looking at alarms in downstream management so they can make predictions of what failures occurred and and how to correct them.
But they’re building that on a small scale basis locally. And then there are other people who are looking at it to try to transform how do they manage multi, let’s call it OEM platforms for for and for adding GPUs to those hardware components. So there’s people starting to experiment saying, you can get me to 75 kilowatts of rack, 80 I can do my, you know, liquid cooled, you know, h two hundreds. That’s something they can’t get quickly, especially when most data center space before we even build it is being leased out. So the edge is happening because there’s this power demand.
And when you transform, like people talk about transforming legacy, it’s a lot harder to do that because you’re saying, have a system that was built for one or two kilowatt racks when it comes to space power cooling. Now need to transform that into a computer room that’s modern in terms of what the requirements are. There’s a lot of CapEx investment and the question is, what’s the chicken and egg problem? We try to lean into it only when, you know, we’re not gonna speculate on location. We wanna have anchor customers and tenants.
In the case of Raleigh, because it’s a new product, we did lean into it speculatively. And we believe because we’ve done a lot of work on, let’s say, 30 more locations where we have land, we have a tower, we have fiber providers, we have the capability, we do the zoning and permitting, and we do the power discussions with the local utility to get to several megawatts is a much faster path. We can do that in twelve to eighteen months versus building a three year facility that’s on the order of these 10 to 30 megawatts. Interesting. So so there’s a speed element and there’s this ability to transform your business with risk knowing that the that the underlying GPU hardware is changing so quickly, you could rent it.
You don’t have to put it on prem and buy it. I I’ve even talked to universities about that saying departments are getting grants saying, oh, we need AI and their research, but then the IT department is like, well, where are gonna put it? And then they go, we’ll build a new data center. And then they’ll be like, well, all these departments have their own variations of what they need. Why don’t you just put it in the community and have that be shared, which is really the the basis of cloud.
Brandon Nispel, Analyst, KeyBank: Got it. I want to take a little bit of step back. I mean, you’ve been a CTO for a long time. You’re a technologist. Where where would you sort of characterize where we are from an AI perspective?
Ed Knapp, CTO, American Tower: I mean, look, at the end of the day, people will say ML has been out there for a while. You move from algorithms to other types of deep neural network models. A lot of that work I saw in my tenure at Qualcomm where we’re doing a lot of research looking at those models when they first came out, when they were looking at ResNet and the ability to go to deep neural networks, lots of layers, lots of parameters, that early recognition of, you know, let’s call it images or other types of attributes that you can test against and train against, but the probabilities were still low. As that started to get higher with deep neural network models, the game changed. And then it was really until we got to these large language models which democratized and made it available, everybody’s talking about AI.
So we are at the point where we’re still in the early, I think, innings of transformations, but you’re seeing that in every company is is that we, even ourselves looking at it, how do we use these tools to improve productivity? Part of our initiatives now is efficiency. Right? We’re trying to globalize our business, get all our datasets, and let’s call it let’s call it labeled data into data warehouses so we can start to make more efficient product productive use of that dataset because we had a lot of, like, acquisitions over the years, and we had a lot of towers that were built and operated in Africa, Latin America, and Asia, you know, Europe. They all had different data sets and so we’re trying to harmonize that now as part of an initiative that’s sort of going to be multiyear.
We believe that AI internally will a game changer for that. I still think when you think about it in the context of quantitative and reasoning, to me that’s the world I live in and it’s been early days because we had hallucinations, people entrusted, you get a lot of creativity out of the AI, but how do you really get it to get to an answer that allows me to move forward as an individual more productively? And I start to see that happening now, and more and more companies don’t need the old entourage of, like, all the people when they start out. They can say it’s it’s a few folks and then there’s a lot of AI around them to help them
Brandon Nispel, Analyst, KeyBank: Mhmm.
Ed Knapp, CTO, American Tower: Navigate the landscape. So I I think we’re we’re at a point where it’s being adopted and it’s gonna get pushed out and we need to move from training to actual use cases. And I see a world where there’s a lot of value in orchestration. So being able to orchestrate agents across use cases at the consumer and enterprise level will be super productive and you’ll be able to have your own sort of world that serves you and is much more productive than in administrators or others who are trying to take care of your daily needs. All that goes away and becomes kind of a twin of of your needs and learns who you are, what you do, and almost predicts what you want, you know, brings you that cup of coffee with the robot in the morning.
I mean, those things will happen sometime in the future. But I’m excited. I think this is a really great time in technology, and AI is a big driver of that.
Brandon Nispel, Analyst, KeyBank: Got it. Let’s switch gears, talk about the tower business a little bit. And I even before we get to towers and sort of the spectrum opportunity over the next five years, AST Space Mobile, I mean, direct to cellular service from satellites has been a topic. How do you think about that in terms of maybe an opportunity or or maybe a competitive threat?
Ed Knapp, CTO, American Tower: Yeah. I think I’ve looked at that for many years. First, we we met them, like, six years plus years ago, and we made an early investment in them. And, you know, I thought that that was really important because the way that the AST team was looking at directed devices was very different than what I had seen before in my days at Qualcomm. It all required changes in components.
And I said, you can keep the same cell phone and you can lose a large aperture array in the sky and you can get that up there and unfold it, that’s a game changer. Right? And so we made a couple of investments in the business, but I always believed it’s fully complementary. You’re not gonna take thin layer coverage and few number of satellites and displace the tower business. Towers are there for they’re like railroads and tunnels and infrastructure that I don’t see going away.
Wireless spectrum will continue to be used in many different ways, even shared in the future with AI using it to make more predictive intelligence around where users consume spectrum. We get more efficient in bits per second per hertz. But I think the satellite really transforms this connect the unconnected first to white space, but more along the edges of the boundary where it was uneconomic to really build towers and then ultimately provide a thin layer to to create more of a seamless user experience so that you always have a backstop of maybe texting or maybe some low bit rate voice to be everywhere. And that’s what the SCS order from the FCC did is it said you can’t just do this on a old school licensed by licensed territorial basis, you have to do it nationwide. So AST got through with some of the operators to be able to get access to low band spectrum nationwide.
It’s not a lot of spectrum, but it gives you that thin layer. And then more recently, through a lot of their efforts, the they’ve started to go after and work with partners on MSS spectrum. So there was the l band Legato announcement, and then there was this s band that just came out earlier last week. So those things are adding a little more depth in spectrum, but you’re still talking tens of megahertz versus, you know, what you’re going to see is hundreds of megahertz that are going to be available terrestrial with fiber. So the two of them will have to seamlessly work together, and I think it’s very complementary, and I think it’s super exciting.
And we’ll get to the point where it’s like connect, drop, reconnect to the point where it’s like stay connected but thin to then a more integrated view when we get to six g where NTN gets built in. And now we even have layers of of resiliency in the network and I think that’s really going to help us for disaster recovery and for the future.
Brandon Nispel, Analyst, KeyBank: Now, not just to put you on the spot, DISH earnings call a couple weeks ago talked about building up a satellite network to serve mobile use cases, right, where they’re really talking about trying to take some of those high cost sites for the carriers in rural areas and really complement those or even potentially have them offload a lot of the traffic that would otherwise be on tower site in a rural market onto the satellite service. What do you think about what they were talking about from a sort of like satellite to cellular connectivity?
Ed Knapp, CTO, American Tower: Yeah. Mean, I think in as an idea and conceptually, you can say, yes, I can do that in practice. Think about in building. Think about the way a terrestrial tower is helping in those communities, you know, be more, let’s call it, pervasive in terms of signal strength. You’re not gonna say, okay, let’s take out those towers.
First of all, there’s an infrastructure investment there. You to put beams from the sky directing them directly to a particular area, it’s gonna consume a lot of the the capacity. The satellite’s got thin capacity trying to spread over large area, so it wants to focus it where it’s gonna be most valuable. And if you already have a tower, are you gonna say, oh, I think I could save a a few thousand dollars on on OpEx and I’m gonna I’m gonna use that from the sky. Well, who are you not gonna serve?
Because you’re making that choice. Because you already made that investment, think it’s there to stay. You could argue that around the around the edges. And there’s some benefit. I think some sites might be just completely, like, not covering a lot of pops and just covering land.
Mhmm. And but I think that it’s such a small, small, you know, era in the scheme of things.
Brandon Nispel, Analyst, KeyBank: Okay. Fair enough. Switch gears. I mean, new tax bill was passed. It gave the FCC spectrum auction authority.
They have to auction a certain amount of spectrum over the next several years. Maybe what what do you see as the opportunity for America Tower? What spectrum bands? What what sort of up and coming in your view from from a spectrum standpoint?
Ed Knapp, CTO, American Tower: Yeah. Super excited that we finally got some auction authority back. I think the the the OBBB, I guess, is is what we call it. 800 megahertz, 500 for the government NTIA, 300 FCC needs to get done in two, four, eight years. We’ve looked at all those bands.
Think any so from our business, simply, the tower business is there’s three phases. First phase is spectrum. Spectrum drives new radios, drives new deployment for coverage. That’s that’s all amendments, generally speaking, but could be new colos depending on the frequency band. Second bucket is technology.
So every g is really driving higher bits per second per hertz. How do we get more capacity out of what assets we already have? The third leg of that is is colocation and densification. And so you you can’t squeeze the technology any further, you need to go and build more sites. That’s our business.
So when spectrum starts out, it really opens up that that that framework. And we’ll see that towards six g with even more spectrum around the world harmonizing. But the bands of interest are, first and foremost, upper c band three nine two four two. We had our altitude or altimeter arguments maybe a year or two ago. I think the filters and those things can get changed to the point where that 100 megahertz initially in those frequencies will get picked off pretty quickly.
There’s some re auctioning of AWS that was that was never put out. And then the debates start really around two areas, six gigahertz, which is generally the the unlicensed WiFi. And there’s a lot of spectrum there between upper five and, like, lower seven. The government’s also taken off the table three one to three four and and seven four to eight two or eight one. The the some of those bands are really the ones where worldwide harmonization of six g is gonna happen.
So we have some soul searching to do there, but I think I always believe six to seven, there could be room there to work with the WiFi community through more advanced techniques of coexistence and and spectrum management, shared spectrum management, but that’s gonna be probably a debate. The other one is CBRS. There’s some proposals out there that says, oh, let’s reclaim CBRS and move them to three one three four. I I don’t see that really happening. There’s so much invested in private five gs.
I’ve done a lot of we’ve done a lot of work too in private five gs during my tenure, and I think that that market is really starting to take off and there’s a lot of companies that are benefiting from that. And I see though that there’s also 12 gig as you get to the upper mid band. Those bands will take more time in terms of components and and relocations. So the top of the list is the three nine to four for the for the FCC followed by what they what they could do with the UNII bands at at, say, upper five to to seven, eight. What do they do in there?
On the NTIA, they have four nine, they have four four, four five. They have some of the other spectrum that they’re looking at, you know, beyond that in terms of two nine, two seven. There’s some things in there that they’re looking at as well. NTIA is really the key here going forward because the FCC doesn’t have as much wiggle room with spectrum. And we just need to do a better job as an industry of getting more efficiency out of what we have.
Brandon Nispel, Analyst, KeyBank: So the upper C band should be sort of first to auction.
Ed Knapp, CTO, American Tower: And that’ll be great for, you know, again, the operators to get more capacity.
Brandon Nispel, Analyst, KeyBank: What do you what do you see as the timeline for potential other
Ed Knapp, CTO, American Tower: Well, they have they have to do that in two years. Right?
Brandon Nispel, Analyst, KeyBank: This is the first For the upper C band.
Ed Knapp, CTO, American Tower: Yeah. That’s the first step is two years. Four years, they have to deploy it by, I guess, is the is the the auction will be in two years is what they’re saying.
Brandon Nispel, Analyst, KeyBank: And then in between that two and four year period after the upper C band auction, six gigahertz,
Ed Knapp, CTO, American Tower: four gigahertz? I think there’s a fight on six. There’s a fight on CBRS that has to happen. There’s a little bit more work up in the upper twelve, twelve gigahertz that has to happen. The government, again, with the NTIA has to work to get 500 megahertz.
And so they have a lot of work to do to find out in the four gig what are they going to give up in those frequency bands to get more spectrum out there in the marketplace. I think these are all really good opportunities.
Brandon Nispel, Analyst, KeyBank: Got it. Any questions from the audience in the last minute?
Unidentified speaker: Just a quick one. Five gs seems to have rolled out slower than most of our expectations. Is the new tax bill going to help the carriers finally start moving forward a little faster? Or do we need native AI on our iPhones to get the edge going? Kind of a double edged question there.
Ed Knapp, CTO, American Tower: Well, I think the depreciation piece does help the operators accelerate. And I do see I spent a lot of time looking at the next change into six g. So, you know, the specs aren’t there yet. Won’t won’t happen till 2030. But I I see that this next level of I was just showing Brandon the the smart glasses that, you know, with Apple turning in that, let’s say, in 2027, but these being in the market today and growing rapidly in terms of one of the use cases for consumers, the next twenty four months will be exciting to see how many of these types of products end up and will drive uplink and will drive demand for for growth in the five g.
We never really had true five g because we didn’t have a five g core with a five g radio. We always had a four g core with a five g radio. Some operators were faster than others. I think they’ll all get there now. Then we could start slicing the network.
We could start monetizing parts of five g that we we hadn’t been able to do. Before that, it was just best efforts, and it really was more incremental ARPU if you could get it, by charging more and then consumers weren’t ready for that. They said, I get everything I need with four g. So we’re in a position now, I think, that’s really good at monetizing five g, getting more use cases out, getting these new devices in, and sets the table for why we need six g. Because you could argue five g’s been slow.
Why do we need to invest in six g? Well, it’s the spectrum and then it’ll be new applications. And in that world, we’re looking at taking the physical world, which think about AI. Right? We’re only dealing with text, maybe some other multimodal like in terms of image and and video.
Today, you’re gonna sense the environment and integrate that. So you’ll have physical models, as Jensen’s talked about, Taking the physical world and modeling that, that’s going to have to get pushed down to the edge. And machine to machine, so whether you’re doing a drone or autonomous car or robot or DoorDash delivery, that’s going to require a lot of localization of sensing and and communication between that. So I see a world of what I would call telecomputing. Right?
The telecommunications network and computing have to merge in a way at the edge that gives you that user experience, and that’ll lead us into the next decade. And I think that’s that’s great for the operators. I think it’s great for consumers and businesses and obviously for infrastructure companies.
Brandon Nispel, Analyst, KeyBank: Great. With that, we’re out of time. Ed, thank you very much. Thank you, Brendon. Awesome.
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