DayOne Weighs IPO Delay Amid Data Centre Volatility
Singapore's DayOne may delay or downsize its US IPO, targeting $2.5-$3 billion instead of $5 billion, as sector volatility shakes investor confidence.
Singapore-based DayOne Data Centers is evaluating a possible delay or reduction in size for its US initial public offering. The company may now seek to raise between $2.5 billion and $3 billion, roughly half of its original $5 billion target, but could still proceed in the coming weeks. Backers of the firm, which filed for the IPO in October, include Coatue, Hillhouse, GDS Holdings, SoftBank Vision Fund, and Citadel’s Ken Griffin. The offering is being led by Morgan Stanley, JPMorgan Chase, Bank of America, and Citigroup.
Sector Volatility and Recent Failures
The IPO considerations follow increased volatility in the data-centre sector, highlighted by a string of challenging listings. Australian firm Firmus Grid recently withdrew a roughly $5 billion IPO due to valuation concerns after investors declined to bid for more shares. Other market entrants have also faced difficulties.
| Company | Issue |
|---|---|
| Firmus Grid | Withdrew ~$5 billion IPO |
| AirTrunk | Delayed planned Singapore REIT IPO to 2027 |
| Elice (South Korea) | Fell 32% on Seoul debut (Oct 20) |
| Coreweave | Shares more than halved since May peak |
| Nscale | Encountering pushback over target IPO valuation |
| Nextdc (Australia) | Shares fell after cutting earnings guidance |
Some investors expect market volatility to ease after the US midterm elections on November 3. They are also watching the upcoming listing of Anthropic as a gauge of broader AI-sector sentiment.
Regulatory Scrutiny and Global Cases
Regulatory and legal challenges are adding to the sector's headwinds. Australia's corporate regulator, ASIC, is making enquiries into Firmus' failed IPO. ASIC Head of Enforcement Chris Savundra said the enquiries are "in the usual course." Meanwhile, in Japan, Tokyo residents plan to sue GLP Japan to halt its data centre project in Akishima, which includes three logistics buildings and eight data centre buildings. Residents argue the project threatens wildlife, drains water, and causes pollution, in what would be Japan's first civil lawsuit against a data centre operator.
Strategic Investors and Capacity Expansion
Amid the IPO uncertainty, other players are pursuing different growth strategies. Singapore-founded Aolani has signed letters of intent to take up 500MW of AI data centre capacity in Malaysia, with supply of the AI infrastructure and GPUs. Its committed Malaysian capacity is set to rise to up to 580MW by 2027 from about 80MW this year. Separately, France's Tikehau Capital is seeking a new strategic investor to fuel its next phase of growth, having held talks with several international firms and mandated an investment bank to advise on a process that has been underway for months. DayOne's decision on whether to proceed with its reduced IPO is expected in the coming weeks.
