Private equity investors and asset managers globally are gearing up for significant M&A and investment activities associated with data centers in the Asia Pacific region, driven by the surge in artificial intelligence (AI) adoption fueling demand for digital infrastructure.
The rapid pace of transactions in the region, home to the world’s largest population, mirrors the response of countries and corporations to the escalating demand for AI, necessitating expanded data capacity, industry insiders revealed.
According to LSEG data, Asia Pacific, including Japan, has dominated M&A activity in the global data center market this year, with transaction values totaling $840.47 million, surpassing half of the global sum. In 2023, the region witnessed record-breaking data center deals amounting to $3.45 billion, a figure expected to be exceeded this year with several substantial transactions in the pipeline.
Multiple financial sponsors, such as Blackstone Inc (BX.N), are eyeing AirTrunk for acquisition, a company owning 11 hyperscale data centers across Australia and the wider region. Sources close to the deal suggest that AirTrunk’s owners, Macquarie Group (MQG.AX) and Canada’s Public Sector Pension Investment Board (PSP), are targeting a valuation of up to A$15 billion ($9.8 billion), potentially marking Asia’s largest data center transaction this year.
Microsoft Corp (MSFT.O) recently announced a $2.2 billion investment over the next four years in Malaysia to expand its cloud and AI services throughout Asia, further indicating the escalating interest and investment in data infrastructure in the region.
The surge in data center investments in Asia mirrors trends seen in the U.S. and Europe, with tech giants like Amazon (AMZN.O), Microsoft, Alphabet Inc (GOOGL.O), and Meta Platforms (META.O) rapidly expanding their AI capabilities.
The rise in AI-driven data consumption is propelling the need for enhanced data center capacity, with companies like Telkom Indonesia and NEC exploring potential deals worth billions of dollars in the region.
U.S. investment firm Bain Capital is reportedly seeking financing for Chindata’s international assets and its China operations, following its privatization of Chindata last year in a $3.16 billion deal.
Goldman Sachs Asset Management (GSAM) has deployed over $1 billion in data center development across Asia in the past three years and plans to continue investing in projects, particularly in Japan and South Korea, to meet the evolving demands of AI-driven data consumption.
