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KKR and Warburg Invest Heavily in Asia Data Centers Amidst the AI and Cloud Surge.

“Global Investors Target Asia’s Booming Data Center Market Amid AI and Cloud Surge”

In the wake of a flourishing artificial intelligence boom, Asia has emerged as the latest focal point for international investors eyeing opportunities in the data center sector. Major players such as KKR & Co. and Bain Capital are capitalizing on the region’s escalating demand for computing power and data storage.

Similar to trends in the United States, Asia is witnessing a surge in data center demand driven by industry giants like Amazon.com Inc. and Alphabet Inc.’s Google expanding their cloud services. The recent proliferation of generative AI technologies is further propelling the need for increased data and capacity, while the region’s growing population is contributing to heightened storage requirements.

Projections from Cushman & Wakefield indicate that demand in Southeast Asia and North Asia is poised to grow by approximately 25% annually through 2028, surpassing the 14% annual growth anticipated in the United States.

Udhay Mathialagan, Global Head of Brookfield Asset Management Ltd.’s data center business, notes that the trend typically starts in the U.S. before extending to Europe and eventually reaching the Asia-Pacific region. He emphasizes the region’s diversity but highlights the commonality of a widespread online presence, necessitating robust connectivity and top-notch data centers.

Investors have wasted no time making strategic moves. In August, Bain Capital unveiled plans to privatize Beijing-based data center firm Chindata Group Holdings, valuing it at $3.2 billion. In September, KKR & Co. secured a 20% stake in Singapore Telecommunications Ltd.’s regional data center business for approximately $800 million. Blackstone Inc. also entered the fray by launching its first wholly owned data center platform in Asia in November 2022.

KKR envisions the potential to invest $1 billion in equity for data center projects in the Asia-Pacific region, including the Singtel platform. Projesh Banerjea, KKR’s Director of Infrastructure, highlights that the returns from such investments align with the mid-to-high teens targets set for KKR’s infrastructure strategy.

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