Data centre operator DayOne is pushing ahead with its 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 develops and operates data centres for cloud and AI customers. It plans to make its filing with the U.S. Securities and Exchange Commission public in mid-October and list in November, the people said, speaking anonymously to discuss confidential matters. The plans, including the timing of the IPO, are subject to change, the people cautioned. DayOne declined to comment.
DayOne’s IPO intentions follow two setbacks for data centre operators this week: 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 that rely heavily on a single AI customer or require large amounts of capital upfront face greater scrutiny.
“The dividing line is whether demand is contracted and already energized, 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 said.
Investor scrutiny is intensifying as a growing pipeline of companies head toward the public markets, with data centre developers and operators including Switch, Vantage Data Centers and CyrusOne exploring or preparing IPOs.
Switch has filed confidentially for an IPO, and is expected to launch its offering following DayOne, one of the people said.
Switch did not respond to a request for comments.
A MORE DIVERSIFIED OFFERING
DayOne’s geographic diversification and the fact it has operational data centres, not just ones under development, have helped distinguish it from some rivals in the eyes of investors, one of the people said.
The company, backed by investors like Coatue and Hillhouse, raised US$4.5-billion in a Series C funding round that closed in June. It could seek to raise as much as US$5-billion in the IPO at a valuation of about US$20-billion, Reuters has reported.
It has secured about 2.1 gigawatts of capacity bookings and operates across Asia-Pacific and Europe, including Malaysia, Hong Kong, Japan, Finland and Spain, according to its website.
Meanwhile, SoftBank-backed SB Energy has postponed plans to formally market its IPO this week as it works to address additional questions from the SEC. There are also investor concerns over the valuation it is seeking and its reliance on OpenAI as a major customer, one of the three people familiar with the matter and another person said. SB Energy is seeking a valuation of about $60 billion, one of them added.
SB Energy declined to comment.
There have been various dealings between SoftBank, SB Energy, its main data centre customer OpenAI and OpenAI’s chip supplier Nvidia in recent months.
Nvidia has agreed to provide a guarantee of up to US$105-billion to help OpenAI lease the Ohio data centre being developed by SB Energy, while also investing US$1.5-billion in SB Energy.
OpenAI backer SoftBank is taking investor orders for a $10 billion dollar-denominated debt deal to help fund its OpenAI investments. The company previously took a loan backed by the OpenAI stake.
AI SPENDING FACES CLOSER SCRUTINY
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 materialize, 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, said Neil Bear-Hetherington, director of data centre capital markets, Asia Pacific, at CBRE.
For data centre developers, that makes the identity and financial strength of their customers 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 is available.
“The earlier the better. Uncertainty is what hurts data-centre models. 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,” said Yan of Shenton Research.