The data center industry is experiencing significant growth, fueled by the rising demand for AI technologies. Recently, OpenAI announced plans to collaborate with investors, including SoftBank, to allocate at least $100 billion towards data center infrastructure in the United States. Additionally, Microsoft is expected to invest approximately $80 billion this year into AI infrastructure, with other major tech companies also expanding their presence in the market.
Companies such as DataBank, which offers powerful, compute-ready data centers tailored for enterprise clients, are reaping the benefits of this growing demand. For instance, DataBank announced on Thursday that it secured $250 million in funding from private equity firm TJC, along with an additional $600 million through a secondary share offering.
Raul K. Martynek, CEO of DataBank, mentioned in a press release that the influx of capital “reflects confidence in our strategy and our established capability to execute and grow.”
Founded in 2005, DataBank was acquired in 2016 by a consortium of prominent investors, led by DigitalBridge, an asset management firm, and has since merged with several other data center operators. The company has expanded its reach through various acquisitions, including the purchase of Indianapolis-based Lightbound in 2018 and zColo’s U.S. and U.K. data center assets in 2020.
DataBank claims to operate over 65 data centers across more than 27 markets. In the last year and a half, the company has raised a remarkable $5 billion.
“We are thrilled to collaborate with Raul, DataBank, and the other distinguished investors driving DataBank’s ambitious growth trajectory,” said Eion Hu, a partner at TJC, in a statement. “Data centers serve as the backbone of digital transformation and artificial intelligence, and we believe DataBank is exceptionally positioned to benefit from the ongoing demand for dependable, scalable, and energy-efficient infrastructure in an increasingly data-centric environment.”
In a complementary sector, there is a flourishing market for “neocloud” startups, such as Crusoe, which focus on creating affordable, on-demand cloud services primarily for AI applications.
CoreWeave, a GPU infrastructure supplier with partnerships with multiple Big Tech firms, has reached a valuation of $19 billion. Lambda Labs secured a special-purpose financing vehicle worth up to $500 million in April. Meanwhile, the nonprofit Voltage Park announced a $500 million investment in GPU-backed data centers in October 2023. Additionally, Together AI, a cloud GPU hosting platform engaged in generative AI research, raised $106 million in a funding round led by Salesforce last March.
According to a McKinsey report, capital expenditures on the procurement and installation of mechanical and electrical systems for data centers may surpass $250 billion within the next five years, despite increasing scrutiny over the environmental impacts of data centers, including their substantial water consumption.
Compiled by Techarena.au.
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