Blackstone Acquires Australian Data Center Operator AirTrunk for $16.1 Billion

Blackstone Buys Australian Data Center Operator for $16.1 Billion

SYDNEY--Blackstone agreed to buy data-center operator AirTrunk for $16.1 billion, cementing its biggest-ever investment in the Asia-Pacific region as it seeks to capitalize on the boom in artificial intelligence and cloud computing. The deal adds AirTrunk's centers in Australia, Japan, Hong Kong, Singapore and Malaysia to Blackstone's existing portfolio containing $55 billion of data centers and $70 billion more in prospective development. AirTrunk has more than 800 megawatts of capacity committed to customers. Data centers are the physical real estate that house the Internet. Often resembling big box warehouses, they contain the servers that store information uploaded to the cloud and process data on the web, whether that is photos, emails, movies or software. The growth in AI, illustrated by the rapid takeup of services such as OpenAI's ChatGPT, has made data centers extremely valuable to own. Already developers are scrambling to build more data centers and lease capacity to tech giants. But some commercial real-estate owners worry the market has become too hot, and consider data centers to be unattractive when assessed against the valuations of other industrial property. There's also a risk that companies decide to store data privately rather than use public data centers, weighing on future demand. Blackstone wants to become a leader in owning and developing infrastructure that can support AI. It expects about $2 trillion will be spent in building new data centers world-wide in the next five years, half of it outside the U.S. Blackstone invested $33.7 billion in the June quarter, much of which was focused on computing infrastructure. "This is Blackstone at its best: leveraging our global platform to capitalize on our highest conviction theme," Jon Gray, Blackstone's president and chief operating officer, said of the AirTrunk deal. Recent deals included a $7.5 billion debt financing provided by Blackstone and other firms in May to CoreWeave, an AI-focused cloud services provider and data-center operator. Blackstone's $4.5 billion contribution made it the firm's largest-ever debt-financing package, Blackstone co-founder and Chief Executive Stephen Schwarzman said in July. Separately, QTS Data Centers has expanded its lease capacity seven times since Blackstone took it private roughly three years ago. AirTrunk was founded in 2015 and opened its first so-called hyperscale data centers in Australia two years later. Backed by investors including Australia-listed asset manager Macquarie Group, AirTrunk owns enough land to more than double the 800 megawatts of capacity currently committed to customers. "This transaction evidences the strength of the AirTrunk platform in a strong performing sector as we capture the next wave of growth from cloud services and AI, and support the energy transition in Asia-Pacific," said Robin Khuda, AirTrunk's founder and chief executive.

Blackstone seals $16 bln deal for Australia's AirTrunk

US private equity giant Blackstone on Wednesday announced a US$16 billion deal to buy Sydney-based data centre operator AirTrunk, part of an effort to hoover up AI-linked assets in the Asia-Pacific. Blackstone President Jon Gray announced the deal, described by the firm as "Blackstone's largest investment in the Asia Pacific region". AirTrunk runs 11 "hyperscale" data centres in Australia, Hong Kong, Japan, Malaysia and Singapore, serving the burgeoning market for cloud computing and artificial intelligence. Gray said the purchase was a "highest conviction" bet on that market growing. "AirTrunk is another vital step as Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centres, power and related services," he said. The deal will be subject to regulatory approval, but is already being hailed as one of the largest mergers and acquisitions in Australia this year. AirTrunk was founded by Bangladesh-born Robin Khuda, who came to Australia as a university student. The Canada Pension Plan Investment Board was also invested in Wednesday's deal.

Blackstone Is Buying Data Center Operator AirTrunk in a $16B Deal -- Here's Why

AirTrunk is the largest data center platform in the Asia Pacific region, with facilities across Australia, Japan, Malaysia, Hong Kong, and Singapore. Private equity giant Blackstone (BX) said it is buying Australian data center operator AirTrunk in a deal valued at 24 billion Australian dollars ($16.12 billion), as demand grows for data centers to support cloud computing and artificial intelligence (AI). AirTrunk is the largest data center platform in the Asia Pacific region, with facilities across Australia, Japan, Malaysia, Hong Kong, and Singapore. Blackstone executives said the deal adds to the firm's existing portfolio of $55 billion in data centers around the world, with another $70 billion worth of "prospective pipeline development." "AirTrunk is another vital step as Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centers, power and related services," Blackstone Chief Operating Officer Jon Gray said in a release. The private equity giant said Tuesday that some $2 trillion is expected to be spent on data centers globally over the next five years, with $1 trillion of that in the U.S. Blackstone has made a number of investments in acquiring debt and equity of other companies in the data center space.

Blackstone to buy Australia's AirTrunk in $16 billion deal

The Blackstone Group headquarters in New York City. -- Reuters file Blackstone will buy Australian data centre group AirTrunk for an implied enterprise value of over A$24 billion ($16.10 billion), it said on Wednesday, in what would be Blackstone's largest investment in the Asia Pacific region. The alternative asset manager, along with the Canada Pension Plan Investment Board (CPP Investments), is acquiring AirTrunk from Macquarie Asset Management (MAM) and the Public Sector Pension Investment Board (PSP). The transaction needs approval from the Australian Foreign Investment Review Board (FIRB), given the asset is being bought by overseas parties. At $16.1 billion, the deal is the largest buyout in Australia this year and one of the biggest in recent history. Global private equity investors and asset managers are readying for billions of dollars worth of M&A and investments linked to data centres in Asia Pacific, as the artificial intelligence (AI) boom fuels demand for digital infrastructure. The value of AirTrunk increased during the sales process, which officially began in March, due to the increasing usage of AI which requires greater data centre capacity. CPP Investments said in a statement on Wednesday it would hold 12 per cent of AirTrunk once the deal was finalised. "CPP Investments has invested in the Asia Pacific data centre sector for several years, and we have witnessed significant growth in this space, fueled by a strong demand for digital infrastructure and, more recently, the increasing adoption of artificial intelligence," said Max Biagosch, CPP Investments' global head of real assets. Reuters reported on Monday the Blackstone led group was nearing a deal to win control of AirTrunk.

Blackstone just made a $16 billion bet on AI

Blackstone is buying Australian data center company AirTrunk for $16.1 billion, as the asset management giant hopes to establish itself as a data platform leader in the artificial intelligence boom. The acquisition is Blackstone's largest investment in the Asia Pacific region, the company said Wednesday. Sean Klimczak, global head of Blackstone Infrastructure, and Nadeem Meghji, global co-head of Blackstone Real Estate, said the move will expand Blackstone's data platform presence, which is the foundation of AI capacity and development. "Digital infrastructure is experiencing unprecedented demand driven by the AI revolution as well as the broader digitization of the economy," the pair said in a statement. Prior to AirTrunk, Blackstone's portfolio consisted of $55 billion worth of data centers, including facilities under construction, and more than $70 billion in prospective development, they said. AirTrunk will add 800 megawatts of data center capacity to Blackstone's portfolio, and owns land to support over 1 gigawatt of future growth in the region, according to the company. "AirTrunk is another vital step as Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centers, power and related services," said Blackstone president and chief operating officer Jon Gray. Data centers are physical locations that store computing machines and other hardware containing computing infrastructure that powers IT systems. Given the massive amounts of storage and energy required by AI, firms across industries have already invested billions to build up their capacity. Blackstone said it's looking to capitalize on the estimated $2 trillion in capital expenditures earmarked for building and facilitating new data centers worldwide over the next five years, including $1 trillion in the U.S. alone. The world's largest asset manager, Blackstone touts itself as "a leading investor globally in data centers." It has invested in both the debt and equity of a handful of major data center firms, including large-scale cloud platform Coreweave and Digital Realty, and as owner of Kansas-based QTS, a leading global data center company. Last December, Blackstone announced a $7 billion hyperscale data center development joint venture with Digital Realty, which is expected to support approximately 500 MW of total IT load. Robin Khuda, founder and chief executive officer of AirTrunk, said the deal will allow the company to "capture the next wave of growth from cloud services and AI and support the energy transition in Asia Pacific."