AI helps Seagate sell out of exabyte hard drives

Seagate has said it's all but sold out of its exabyte-capacity hard drives until 2028, thanks to the AI boom sparking a cloud and data centre build-out.

The storage giant made the comments following the release of its results, which showed revenue climbed to $3.6bn from $2.4bn last year, and net income leapt to $1.2bn from $488m. Seagate posted margins of 52.3% for the quarter, versus 37.4% last year, and record cash flow of $3.1bn for the year, saying it expected margins and cash flow to grow throughout this year.

Dave Mosley, Seagate’s chair and chief executive officer, said in a statement that the results were "driven by robust cloud data center demand" and predicted that would continue into 2027.

"Our confidence is supported by the scale, quality, and duration of our data center customer commitments in a strengthening demand environment," Mosley added in a conference call, according to an online transcript. "Data center demand now represents approximately 90% of our exabyte shipments.”

He added: "Based on the long-term supply agreements in place today, the vast majority of our nearline exabytes are now allocated into calendar 2028."

AI versus supply

The AI-driven infrastructure buildout has sparked a shortage in components RAM, driving up prices for companies and consumers — but benefiting suppliers.

Despite growing concerns about the costs associated with AI, Mosley expects investment to continue, saying cloud customers remain the largest driver of growth for Seagate, with no evidence of a slowdown.

"Importantly, we are not seeing customers pull back on planning horizons," he said on the call. "As our strategic relationships deepen, many are actively seeking to extend planning horizons through 2029 and beyond, which we believe reflects growing confidence in their own long-term infrastructure needs."

That is driven by how data-hungry AI has proven, Mosley noted, with new data constantly being created and customers hoarding data for longer — which is good news for Seagate and its hard drives.

"With the transition from AI model training to inference to agentic applications, more data is generated and retained for historical context, compliance, and future reuse," Mosley added. "As these data center environments become larger and more complex, customers must balance performance, energy consumption, and cost across distributed infrastructures."

This means that hard drives still have a place versus SSDs and other storage technologies, according to Mosley. "Cloud providers have long addressed these challenges through tiered storage architectures that combine high-performance memory and SSDs with mass capacity hard drives to optimize performance and economics at scale," he said.

Next up

Mosley also revealed details of Seagate's future roadmap, saying testing with customers was underway for its second-gen Mozaic 4 platform, which can support up to 44 terabytes per drive.

"We expect to achieve our next ramp milestone by exiting calendar 2026 with 50% of our HAMR exabytes on our Mozaic 4 platform," he added. "Looking further ahead, Mozaic 5, our 5-plus terabyte per disk platform, remains on track for qualification shipments in late calendar 2027."