NEW YORK, Sept 10 (Askume) – The owners of Switch are considering an initial public offering (IPO) of the data center operator that could value the company at about $40 billion including debt, according to people familiar with the matter.
Discussions about the Switch IPO are still in the early stages, the sources said, cautioning that plans depend on market conditions and no final decisions have been made.
In recent weeks, Switch-owned investment firms have held preliminary talks with investment bankers about a potential stock market breakout, which could happen as early as 2025, the sources said. They spoke on condition of anonymity because the discussions were confidential.
The move comes amid growing investor interest in technology that generates artificial intelligence. The boom in artificial intelligence has fueled the growth of chipmakers such as Nvidia (NVDA.O) and other big technology companies, boosting global demand for infrastructure such as data centers and high-performance servers.
Las Vegas-based Switch will be taken private by DigitalBridge and IFM Investors for $11 billion in 2022. Australian superannuation fund Aware Super buys a minority stake from Switch owners in 2023.
DigitalBridge, IFM and Aware Super declined to comment. Switch did not immediately respond to a request for comment.
The data center and server industries have seen a surge in deals in recent months, thanks to the proliferation of artificial intelligence.
In early September, Blackstonereached an agreement to acquire Australian data center group AirTrunk for more than A$24 billion (US$16 billion). August, AMD AMD.O agreed to buy server maker ZT Systems for $4.9 billion in an effort to expand its portfolio of AI chips and hardware and compete with Nvidia .
Switch was founded in 2000 by technology entrepreneur Rob Roy, and its main customers areThat includes Nvidia, Dell Technologies and FedEx (FDX.N) .
According to the Switch website, Switch’s data center has been powered by renewable energy since January 2016. This makes its operations attractive to technology companies with environmental impact goals and seeks to accelerate decarbonization investments without hindering growth associated with power-hungry data centers.
According to a recent report from Morgan Stanley,The global data center boom is expected to result in emissions equivalent to about 2.5 billion tons of carbon dioxide by the end of this decade.
(USD 1 = AUD 1.5017)
