Asia-Pacific Data Centre Deals Soar Amid AI Expansion

As the artificial intelligence (AI) era advances, the Asia-Pacific region is seeing a surge in data centre investment. Due to an uptick in AI-driven demand, these repositories of computing power are more in demand than ever. High-stakes deals worth millions point to an industry in the midst of a significant growth phase.

Rising Demand for Data

AI requires vast amounts of data to learn and operate effectively, which in turn necessitates increased data storage capacity. This need is driving an unprecedented boom in the data centre industry across the Asia-Pacific. Companies and countries in this densely populated region are rushing to build more data centres to keep up with the AI boom. The number of deals and the dollars being invested underscore this trend. According to data from LSEG, the value of data centre mergers and acquisitions (M&A) in the Asia-Pacific accounts for over half the global market—totalling US$840.47 million already this year.

Record-Breaking Investments

In 2023, a historic high was reached with investments in data centres hitting US$3.45 billion. Now, in 2024, the number is expected to climb even higher, fueled by some large transactions currently on the horizon. Data centres are powerhouses of technology: they are secure, climate-controlled buildings equipped to house vast arrays of servers and storage systems. Equipped with redundant power sources and robust internet connections, they are becoming the backbone for AI projects undertaken by businesses globally.

Major Deals on the Horizon

A number of high-profile deals are stirring the data centre market. Investment giants such as Blackstone are eyeing AirTrunk, a leading data centre operator in the region with 11 hyperscale facilities, potentially valuing the company at up to A$15 billion. Similarly, global institutions like Macquarie Group and Canada’s Public Sector Pension Investment Board are also key players.

Industry experts predict that the data centre space will see even more intense activity going forward. Executives like Cadence Advisory’s Garren Cronin have suggested that the AI revolution is pushing a surge of demand for premium data centre capacity. Microsoft and other tech giants are also contributing to the expansion, with new facilities planned in Thailand and Indonesia.

State-run enterprises like Telkom Indonesia and Japanese conglomerate NEC are also exploring deals worth potentially billions of dollars. Strategic partnerships and international interests are poised to reshape the data centre landscape in Asia.

Meanwhile, investment firms like Bain Capital and Goldman Sachs Asset Management continue to drive the industry's growth, focusing on areas such as Japan and South Korea. They recognize that the capacities required for AI are propelling a new wave of demand for data centre infrastructure.

Asia-Pacific, data, AI