Modern Money SmartPod
Modern Money SmartPod
Road Trip: ICE's Stuart Williams Dives Into the Data Side of Market Growth
Data has been woven into the DNA of Intercontinental Exchange (ICE) since its inception. And as markets continue to expand at a rapid pace, managing the underlying data in a resilient, scalable and accessible way remains a key priority for ICE.
In this quick update from the sidelines of the 50th annual International Futures Industry Conference, ICE Chief Operating Officer Stuart Williams details how quickly messaging traffic is growing across ICE's markets. Williams also outlines the planning and investment ICE is putting into data centers and other critical elements of market infrastructure.
(Note: This transcript was created using AI. It has not been edited verbatim.)
Sean McMahon 0:05
Hello everyone, and welcome to the Modern Money SmartPod. I'm your host, Sean McMahon, and the road trip for this podcast continues, because we're coming to you this week from the International futures Industry Conference in Boca, Raton, Florida, joining me right now is Stuart Williams, the chief operating officer for Intercontinental Exchange. Stuart, how you doing today?
Stuart Williams 0:27
Sean, thank you for having me on. It's great to see you.
Sean McMahon 0:32
Well, you know, Boca is known for having a jam packed agenda with tons of speakers and panels and I'm sure meetings for you and the team at ICE. So what have some of the highlights been for you so far?
Stuart Williams 0:42
You know, we've just come out of the 20th Hall of Fame induction ceremony, and some real industry titans getting getting recognized as part of that so obviously, Jeff is one of them, but but Terry and Don Wilson and others amongst that group. So it's really been an opportunity to reflect on massive contributions to our industry, huge amounts of innovation. And obviously that then makes us start to think about, well, what's next from an innovation perspective? So that's always very exciting. In terms of other themes, you know, obviously the geopolitical environment we're in right now, everyone's talking about that, and where that goes, volatility that comes from that. And then, of course, you know, things like energy transition, 2022 five, 24/7 trading. These are some of the themes that we've been talking about. Been talking about.
Sean McMahon 1:23
Okay, then speaking of all the volatility and energy transition, what are you seeing across all the markets where ice has a presence?
Stuart Williams 1:31
Yeah. So look, you know, our energy markets have been doing incredibly well over the last number of years. And you know, one of the things that we spend a lot of time investing in over the last decade or so is looking at each of the intersections in the pricing matrix between geography and energy type, and making sure that we can support a pricing component and a hedging instrument in our derivative markets that reflect that pricing dynamic. And so really what we have now is an energy complex, which is really a matrix of products. So you know, over 1000 energy products where our customers can manage the price risk that they face, both from a supply and a demand perspective, in any geography. And as we've seen, the global energy supply chain reconfigure itself post Russia's invasion of Ukraine. As in as an example, we've seen a lot of our customers able to hedge that risk and to understand and facilitate some of that transition through through our markets. And so that that's been that's been good to see, but also we've seen a number of new types of participants coming to the market and using those energy markets. So that's been a great growth area for us. And you know, we're continuing to stay close to our customers and continue to roll out new markets as they need it. So that's been one interest rate markets have also really done well over the last number of years. Obviously, we're now coming out the back of very low interest rate environment during COVID interest rate hikes, obviously, we've seen a number of them already, but and a lot of uncertainty around the inflation trajectory and a divergent set of views based on whether you're in Europe, the UK or in the US. And so that's been great for volumes in our interest rate markets. Obviously, last week we saw quite a step change in Germany around raising the debt ceiling there and raising additional capital in Europe for for defense spend. And that has an impact on expectations around interest rates, so that that's that's been good to see. And then, of course, in the US equity markets, you know, the US equity markets, once we got to COVID, we'll call it just over 200 years old, and doubled within a couple of years after COVID. And so we've really seen this incredible growth, both in terms of interest from retail additional retail players, not just the US, but globally, coming into into those markets, but also companies, global companies looking to come and access what is now very clearly the world's deepest and most liquid capital market to raise their capital here. So you know, all of these things are really pointing towards a lot of growth right across the different asset classes that we support.
Sean McMahon 4:01
So with all that growth you just outlined, there's got to be a tremendous increase in message volume. So how are you and the team at ICE handling all that?
Stuart Williams 4:10
Yeah, there has been, I mean, just to put some numbers around that, if you So, I take 2019 as a kind of pre COVID baseline in the five years since 2019 the futures market message volumes so across the six futures markets that we operate have doubled in the five years since 2019 in US equity markets, over that same time period, message volumes have also doubled. In the US options market, they've quadrupled. So we're at the stage now where we are processing about half a trillion messages per day, and that was in 2024 in 2025 year to date, that's gone up to three quarters of a trillion messages a day. So there's a huge volume of messages. And so we've continued to invest in our in our physical infrastructure, both on the networking side, we operate a low latency, high availability. To it called Ice global networks that connects participants, really around the world, to both our markets, but also to other markets around the world, and to market data in a secure and a low latency way. And so we've continued to innovate and invest in that business line. And then from a data center perspective, obviously, we operate our own data centers for our own infrastructure, and so we've continued to scale that infrastructure to be able to deal with not only that message volume, but we stress tested multiples of that message volume so our infrastructure can cope with two, 3x of those volumes we're seeing today. But we also we provide the opportunity for customers that need to co locate with us, to come and take space and power in our data centers with us. And so over that five year period, the cola power capacity that we we have got in our data centers now, has doubled, and that really reflects that increased activity in the markets.,
Sean McMahon 5:51
Okay, now obviously, you know, data's been a part of the DNA for ice since, since you were founded. What does your roadmap look like going forward, amid all the competition from everyone's looking for data centers for the rise of AI. What kind of investment and infrastructure do you have mapped out?
Stuart Williams 6:06
Yeah, so owning and operating our own data centers has been a core part of ice. You know, obviously we will meet our clients in the cloud where they need to gain access to our data in the cloud. That's fine, but you know, our DNA really is around owning and operating our own infrastructure. And so we have space, we have Park, spare power capacity, and we're continuing to evolve that, and to ensure that we keeping ahead of demand. And we're spending a lot of time with our customers. You know, we we've said a number of times that we don't have an R and D department. Our R and D department are our customers, and that's the that's the most effective way to ensure that you build something that your customers need, and so, you know, I'm spending a lot of time with customers, hearing what their plans are and how they evolving their technology, and how they see the markets evolving, and making sure that we keep in lockstep with that. You know, physical infrastructure investments take time. They're capex intensive, but, you know, we work hard to be in a position where we can be ready to meet our customer demands as those arise, and not leave a lag time between that.
Sean McMahon 7:05
Yeah, I like that. That saying that your customers are your R and D department. And speaking of customers, I'm sure Boca is a place where you get to talk to a lot of them. Absolutely. And so I'm gonna ask you to kind of maybe appear into a crystal ball, and when we get back here together next year for the 51st bokeh, what do you think are me, some of the hot topics when it comes to data, infrastructure and technology?
Stuart Williams 7:24
Yeah, so I think, I think we'll know a lot more around where the direction of travel is from a geopolitical perspective. That'll have an impact on what we're thinking about interest rates at that point in time. It'll have an impact on what we're thinking about energy markets at that point in time, how much new supplies coming out of the US? Where's OPEC plus, in terms of their supply targets? So, you know, we'll, we'll know a lot more from that perspective. But no doubt there'll be other questions we're asking from an infrastructure point of view. You know, I think, I think we're on a long term trajectory here. You know, the US has really had flat electricity growth for 20 years. Now, the forecasts are that US electricity demand is going to grow at about 3% per annum for the next decade, and that's driven by some combination of data center growth AI as well, as you know, expected onshoring of some manufacturing. So I think from from that perspective, we're now into a cycle where the potential benefits of new technologies like AI are such that the investment cycle is leaning into that. And so, you know, we're doing that for our own business. We're seeing our customers do that for their businesses. So I think we'll continue to see a lot of innovation in material science, a lot of innovation in new chip designs, a lot of innovation in cooling, a lot of innovation in higher density and greater efficiency usage of power. So these are things I think we're going to see really growing and a lot of innovation in for the next the next number of years.
Sean McMahon 8:51
Okay, well, we'll have to get together next year here in Boca and check in on some of those predictions.
Stuart Williams
We'll be happy to do so.
Sean McMahon
Stuart, I know it's a busy week, so I appreciate taking the time to talk to me.
Stuart Williams
Thanks. Sean
Sean McMahon
Well, that's our show for today. But before I get out of here, one last reminder, be sure to watch for more episodes of this podcast as we bring you all the news and headlines from the 50th annual International Futures Industry Conference in Boca.