The explosion of artificial intelligence (AI) is driving demand for digital infrastructure, and M&A deals and investments related to data centers in Asia this year will be accelerated.
The strong pace of trading in the world’s most populous region comes as countries and companies respond to booming demand AI boom. Asia-Pacific (APAC) has led transaction activity in the global data center market this year, with mergers and acquisitions (M&A) value reaching 840.47 million USD, accounting for more than half of the global amount, according to data from financial group LSEG.
In 2023, the region’s data center deals will reach a record high of $3.45 billion, according to LSEG. This year, that number should be surpassed with at least a few big deals in the pipeline.
An operations center at the Keppel data center in Singapore on July 3, 2023. Photo: Reuters
Several backers, including global investment giant Blackstone, are looking to acquire AirTrunk, which owns 11 hyperscale data centers in Australia and the rest of the region, sources say. news of Reuters disclosure.
AirTrunk’s owners – Macquarie Group and the Public Sector Pension Investment Board of Canada (PSP) – are targeting a valuation of up to AUD 15 billion ($9.8 billion). This could be Asia’s largest data center transaction of 2024.
Garren Cronin, CEO of consulting firm Cadence Advisory, commented: “The AI revolution is creating unprecedented demand for high-quality data center capacity. The new capacity that needs to be built in APAC over the next three to five years is staggering. I predict the influx Transactions in the data center market will be enhanced this year.”
Last week, Microsoft said it would pour $2.2 billion over the next four years in Malaysia to expand its cloud and AI services across Asia. A day after announcing a $1.7 billion investment in AI and cloud facilities in Indonesia, the software firm announced the opening of its first Asian data center in Thailand.
The surge in data center investments in Asia follows a similar trajectory to that in the US and Europe as tech giants including Amazon, Microsoft, Alphabet and Meta Platforms rapidly expand their capabilities. its AI power.
Other potential deals in Asia include Indonesian carrier Telkom selling a $1 billion stake in its NeutraDC data center business and Japan’s NEC considering a $500 million data center sale. USD.
Telkom’s Senior Vice President of Investor Relations, Ahmad Reza, told Reuters that Telkom is ready for a strategic partnership to bring new capabilities and new markets to NeutraDC. The company is still looking for the best partner and hopes to complete the transaction by the end of the year.
Goldman Sachs Asset Management (GSAM), which invested in AirTrunk in 2017 before selling its stake to a consortium led by Macquarie three years later, has deployed more than $1 billion to develop the data center. data in Asia over the past three years.
The company will actively invest in additional projects, with a particular focus on Japan and Korea, said Nikhil Reddy, head of APAC real estate at GSAM.
“AI creates a different type of need for data centers beyond the traditional need of the cloud focusing on low latency. Now with AI, which requires large data consumption, capacity is key lock up”, he said.
(Theo Reuters)