Key facts
- Investors are demanding proof that AI infrastructure companies can absorb rising interest rates and computing-power costs.
- M&A involving Asian data centres has reached $21.3 billion this year, more than double 2025's total.
- Equity capital market fundraising for the sector is down 4.6% year-on-year.
- Firmus struggled to convince investors it could deliver on revenue projections while carrying about $30 billion of debt.
- Benchmark 10-year US Treasury yields saw their sharpest quarterly rise this century last month.
A market selloff and rising interest rates are forcing companies involved in the AI data centre boom to reassess their fundraising plans and potentially pay more for capital. Investors are increasingly demanding proof of profitability and sustainable business models, leading to delays or cancellations of planned listings.
Several companies, including Blackstone-backed AirTrunk REIT, Nvidia-backed Firmus, and SoftBank-backed SB Energy, have seen their listings pulled or paused. This heightened scrutiny comes as investors re-evaluate whether the rapid spending on computing power, land, and energy for AI infrastructure can yield adequate returns.
Despite these setbacks, mergers and acquisitions in the Asian data centre sector are on track for a record year, reaching $21.3 billion. Debt financing has also remained robust. However, equity capital market fundraising has seen a 4.6% drop compared to the same period in the previous year.
Factors contributing to the increased investor caution include rising borrowing costs, with benchmark 10-year US Treasury yields experiencing their sharpest quarterly increase this century. This has led to a closer examination of projected revenues and debt burdens. Additionally, developers face growing opposition in some markets over environmental concerns and regulatory uncertainty, making it more difficult to secure land and power supplies.