Data-center companies pursuing public listings confront increased investor scrutiny and market volatility, prompting reassessment of IPO timing and prospectus positioning.
Data centre operator DayOne is pushing ahead with plans to go public as soon as November, according to three people familiar with the matter, even as higher interest rates and setbacks elsewhere in the data centre ecosystem threaten to narrow the window for companies to tap the IPO market. The Singapore-based company, which develops and operates data centres for cloud and AI customers, plans to file publicly with the US Securities and Exchange Commission in mid-October and list in November. The people cautioned that the plans, including timing, remain subject to change. DayOne declined to comment.
DayOne's IPO intentions follow two recent setbacks for data centre operators: the delay of SB Energy's expected IPO and news of a dispute centring on Oracle and Blue Owl that could delay a data centre project in New Mexico. The contrast highlights how the market for AI infrastructure is maturing after years of strong investor enthusiasm. Companies with diversified customers and greater visibility into demand can still attract interest, while projects relying heavily on a single AI customer or requiring large amounts of capital upfront face greater scrutiny.
"The dividing line is whether demand is contracted and already energised, or only planned," said Ke Yan, head of research at Singapore-based investment research firm Shenton Research. With power now the key constraint, investors favour operators with secured power supply, a large share of contracted capacity already operating or nearing completion, and long-dated take-or-pay contracts, he noted.
Investor scrutiny is intensifying as a growing pipeline of companies head toward the public markets. Data centre developers and operators including Switch, Vantage Data Centres and CyrusOne are exploring or preparing IPOs. Switch has filed confidentially for an IPO and is expected to launch its offering following DayOne, according to one of the people. Switch did not respond to a request for comment.
DayOne's geographic diversification and operational data centres, rather than only those under development, have helped distinguish it from some rivals in investors' eyes. The company, backed by investors including Coatue and Hillhouse, raised $4.5 billion in a Series C funding round that closed in June. It could seek to raise as much as $5 billion in the IPO at a valuation of about $20 billion, Reuters has reported. The company has secured about 2.1 gigawatts of capacity bookings and operates across Asia-Pacific and Europe, including Malaysia, Hong Kong, Japan, Finland and Spain.
Meanwhile, SoftBank-backed SB Energy has postponed plans to formally market its IPO this week as it works to address additional questions from the US Securities and Exchange Commission. Investor concerns centre on the valuation it is seeking and its reliance on OpenAI as a major customer. SB Energy is seeking a valuation of about $60 billion. The company declined to comment.
Recent dealings between SoftBank, SB Energy, OpenAI and Nvidia underscore the interconnected nature of the AI infrastructure buildout. Nvidia has agreed to provide a guarantee of up to $105 billion to help OpenAI lease the Ohio data centre being developed by SB Energy, while also investing $1.5 billion in SB Energy itself. OpenAI's backer SoftBank is taking investor orders for a $10 billion dollar-denominated debt deal to help fund its OpenAI investments, having previously taken a loan backed by the OpenAI stake.
The cost of financing the AI buildout is coming under greater pressure. Higher interest rates make it more expensive to finance facilities whose returns may take years to materialise, while investors are demanding greater visibility into the customers and cash flows that will support those investments. For developers relying on debt, contracted revenue from creditworthy customers is crucial to servicing that debt as they fund costly AI-ready facilities, including high-density racks and liquid-cooling systems, according to Neil Bear-Hetherington, director of data centre capital markets, Asia Pacific, at CBRE.
For data centre developers, the identity and financial strength of their customers is increasingly important to investors evaluating projects that can require billions of dollars of upfront investment. For companies preparing to go public, a less forgiving IPO market and greater scrutiny of AI infrastructure create an incentive to move quickly while investor demand remains available. "The earlier the better. Uncertainty is what hurts data-centre models," said Yan of Shenton Research. "Investors in data centres are looking for yield and growth together, and uncertainty weighs on both, since it raises the cost of the debt that supports the yield and delays the grid and financing that growth depends on."