Speed Bumps Slow Asia-Pacific’s Data Center Gold Rush

Firmus and PLDT pulled data center IPOs this week while governments pressed pause on development in the latest hurdles to Asia’s data center boom.

Asia-Pacific's hectic data center rollout has hit a series of speed bumps. The most dramatic by far was the collapse Friday of Australian-based Firmus’ planned AU$7.1 billion (US$4.97 billion) IPO, which had been expected to be the biggest ASX debut since Telstra’s 1997 IPO.

Firmus, a neocloud company whose shareholders include Blackstone, Jane Street and Nvidia, withdrew its ASX listing application Friday and said it would seek up to $3 billion through private fund-raising, the Financial Times has reported.

It had struggled to win market support at its target price of around AU$11 ($7.67), but even after it offered to cut the price, investors did not have the appetite.

Trading in Maas Group, one of Firmus' shareholders, was halted Friday after the stock dropped 27% in two days. Maas Group has a 3.2% stake in the company as well as outstanding contracts with Firmus worth AU$727 million ($507 million).

Related: Nvidia’s $500B AI Infrastructure Bet Raises Power Stakes

Two days earlier, Firmus had been dumped by CDC Data Centers from their joint AI infrastructure project in Australia after CDC had become troubled by Firmus’ southeast Asian expansion, which had not been a part of the original partnership.

PLDT delays IPO to 2027

Firmus' wasn't the only IPO to go south this week. Philippine telco PLDT put its data center REIT listing on hold until 2027, blaming the decision on higher interest rates. The REIT, Vitro, was expected to generate as much as 24.2 billion Philippine pesos (US$385.1 million) on the Manila bourse.

PLDT said in an exchange filing it had decided to delay the IPO until 2027 due to "current market conditions and rising interest rates." But it said it was committed to the IPO as an important part of its asset monetization and deleveraging plans.

The Philippines' central bank last month hiked interest rates by 25 basis points and is widely expected to announce two more rate rises by the year's end.

Southeast Asian governments have also been forced to press pause on the AI boom. Last week, Indonesia's West Java province halted a 640MW project by Singapore–based BDX, claiming it had not received key approvals, including an environmental assessment.

A month ago, Thailand suspended 166 data center projects – of which 49 were under construction and 117 awaited approval – to allow government committees to write new industry rules that would set standards and maximize the economic benefit to Thailand.

In Malaysia, the center of Asia's data center boom, officials are anxious about soaring the new digital infrastructure's power consumption. Electricity demand growth has gone from 1.5%-2% annually to nearly 10% due to data centers, Siti Safinah Salleh, head of the Malaysian Energy Commission, is reported to have said.

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Salleh warned that recovering energy costs from data center operators is difficult because many are on short-term contracts and have refused to make long-term commitments.

This article was originally published on Light Reading.

About the Authors

Robert Clark is a Contributing Editor at Light Reading.

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