Chinese data centre firm GDS raises US$1 billion for overseas infrastructure expansion.
GDS Holdings, a major developer and operator of high-performance data centres in China and Southeast Asia, has raised US$1 billion from institutional private-equity investors, who subscribed to newly issued Series B convertible preferred shares of the firm’s international affiliate.
That financing via Series B investment in the affiliate known as GDS International, which serves as holding company for Shanghai-based GDS’ data-centre assets and operations outside mainland China, was mostly led by US investors including technology-focused venture-capital firm Coatue Management and hedge fund The Baupost Group, according to a GDS statement released on Tuesday.
Together with GDS International’s existing equity, the Series B funding will be sufficient to capitalise the development of up to 1 gigawatt of total data centre capacity, which is more than twice the current size of the company’s facilities in service and under construction outside the mainland, according to the statement.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
William Huang Wei, GDS founder, chairman and chief executive said on Tuesday:
Within a short period of time, we have created new markets in and around [the] Singapore-Johor-Batam [markets], which are attracting both regional and global hyperscale [cloud-computing service] demand.
“We see tremendous opportunities for growth in these markets, as well as in other new markets which we are currently evaluating.”
GDS Holdings founder, chairman and chief executive William Huang Wei. Photo: SCMP alt=GDS Holdings founder, chairman and chief executive William Huang Wei. Photo: SCMP>
Data centres are secure, temperature-controlled facilities that house large-capacity servers and data-storage systems, with multiple power sources and high-bandwidth internet connections.
Cloud computing technology enables enterprises to manage or distribute over the internet a range of software and other digital resources as an on-demand service, just like electricity from a power grid. These resources are stored inside data centres.
GDS International’s latest funding programme reflects the spate of deal-making activity in the global data-centre market this year, as more enterprises use these facilities to host or manage high-performance computing systems for their artificial intelligence (AI) projects.
Philippe Laffont, Coatue founder, said:
Data centres are mission-critical infrastructure to support the future of AI and cloud.
“We have been very impressed by the [GDS International] management team, and its capabilities to execute and expand the footprint of the business in such a short period of time.”
Established in 2022 with corporate headquarters in Singapore, GDS International’s portfolio currently comprises about 480 megawatts of data centre capacity in service and under construction. An additional 590MW capacity is being held for future development across strategic locations in Hong Kong, Singapore, Johor state in Malaysia, industrial city Batam in Indonesia and Tokyo in Japan.
Pujiang, a town in Shanghai’s Minhang district, is home to a major GDS Holdings data-centre complex that has received state recognition for its green and energy efficient practices. Photo: Handout alt=Pujiang, a town in Shanghai’s Minhang district, is home to a major GDS Holdings data-centre complex that has received state recognition for its green and energy efficient practices. Photo: Handout>
Shares of GDS in Hong Kong closed down 2.10 per cent on Wednesday, while the firm’s Nasdaq-listed stock declined 1.69 per cent on Tuesday.
Once the Series B deal is completed, GDS would only own 37.6 per cent of its international affiliate and would no longer consolidate that unit for accounting purposes, according to the company.
The latest investment followed US$672 million in funding raised for the GDS affiliate earlier this year. In the second quarter, GDS net revenue from mainland China operations grew 8.9 per cent year on year to US$355 million, while its overseas business saw a nearly sevenfold increase to US$35 million.
In its 2020 prospectus, GDS disclosed that the cloud computing operations of Alibaba Group Holding and Tencent Holdings were among its largest customers. Alibaba owns the South China Morning Post.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
READ the latest news shaping the data centre market at Data Centre Central
Chinese data centre firm GDS raises US$1 billion for overseas infrastructure expansion. source
