Data center IPO hopefuls navigate tougher market as investor scrutiny intensifies

DayOne Pushes Forward With November IPO Plans

Data center operator DayOne is advancing its plans to go public as soon as November, targeting a filing with the US Securities and Exchange Commission in mid-October1

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. The Singapore-based company, which develops and operates data centers for cloud and AI customers, could seek to raise as much as $5 billion at a valuation of about $20 billion2

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. This move comes despite higher interest rates and recent setbacks across the data center ecosystem that threaten to narrow the window for companies tapping the IPO market.

Backed by investors including Coatue and Hillhouse, DayOne raised $4.5 billion in a Series C funding round that closed in June3

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. The company has secured approximately 2.1 gigawatts of capacity bookings and maintains operational data centers across Asia-Pacific and Europe, including Malaysia, Hong Kong, Japan, Finland and Spain1

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Market Conditions Create Winners and Losers

The contrast between DayOne's momentum and recent setbacks illustrates how the market for AI infrastructure is maturing after years of strong investor enthusiasm. SoftBank-backed SB Energy has postponed plans to formally market its IPO this week as it addresses additional questions from the SEC2

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. Investor concerns center on the $60 billion valuation SB Energy is seeking and its heavy reliance on OpenAI as a major customer4

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. Additionally, a dispute involving Oracle and Blue Owl could delay a data center project in New Mexico1

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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 Research3

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Power Supply and Long-Term Contracts Drive Investor Preference

With power now the key constraint, investor scrutiny is intensifying around which data center operators can deliver. Investors favour operators with secured power supply, a large share of contracted capacity already operating or nearing completion, and long-dated take-or-pay contracts1

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. DayOne's geographic diversification and operational data centers—not just ones under development—have helped distinguish it from rivals in the eyes of investors2

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A growing pipeline of companies is heading toward public markets, with data center developers and operators including Switch, Vantage Data Centers and CyrusOne exploring or preparing IPOs4

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. Switch has filed confidentially for an IPO and is expected to launch its offering following DayOne1

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Complex Financial Arrangements Highlight Industry Interdependence

The SB Energy situation reveals the intricate web of relationships shaping AI infrastructure financing. Nvidia has agreed to provide a guarantee of up to $105 billion to help OpenAI lease the Ohio data center being developed by SB Energy, while also investing $1.5 billion in SB Energy itself3

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. Meanwhile, OpenAI backer SoftBank is taking investor orders for a $10 billion dollar-denominated debt deal to help fund its OpenAI investments2

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Rising Costs and Capital Spending Reshape Investment Calculus

The cost of financing the AI buildout is coming under greater pressure as higher interest rates make it more expensive to finance facilities whose returns may take years to materialize4

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. AI-related capital spending by the six biggest US technology companies is projected to reach around $1 trillion in 2027, according to Moody's3

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. Investors are demanding greater visibility into the customers and cash flows that will support these 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, said Neil Bear-Hetherington, director of data centre capital markets, Asia Pacific, at CBRE1

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. This makes the identity and financial strength of customers increasingly important to investors evaluating projects requiring 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 is available. The tougher market for IPOs means uncertainty weighs heavily on data center models, as investors seek both yield and growth together2

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