Written by Alessandro Di Giovanni, Kaila Kondas Niza, Nicolò Marmo, Clara Carlhammar | Editor: Letizia Ianninciello
INDUSTRY OVERVIEW
In early 2024, AirTrunk- the leading Asia-Pacific hyperscale data centre platform- was acquired by Blackstone and CPP Investments in a transaction valued at approximately. $24 Billion- one of the largest private equity acquisitions in the global digital infrastructure space. This deal highlights the growing investor appetite for data centres as a yield-generating infrastructure asset class. The transaction happens at a time when the data centre industry has become one of the most essential backbones of the modern economy. Each time people stream a movie, send a message or train an AI model: data centres are working behind the scenes- storing, processing and moving information at a massive scale. This explosion of data driven by cloud computing, AI, 5G and the Internet of Things has transformed what used to be a niche segment of real estate into a cornerstone of global infrastructure.
In the Asia-Pacific region, growth drivers are particularly strong: rising internet penetration, the proliferation of 5G networks and the government initiatives supporting digital economies- all of these elements fuel record levels of capacity expansion. AirTrunk, with its footprint across Australia, Japan, Singapore, Malaysia and Hong Kong, is strategically positioned to capture this regional momentum.
From an investor’s point of view, the sector offers several attractive characteristics: long-dated contracted revenues with high switching costs for hyperscale customers, strong structural tailwinds (AI, cloud growth, edge compute) which underpin growth visibility, large scale barriers to entry and fragmentation that present a good opportunity to consolidate well-capitalised infrastructure players. That said, it is no surprise that infrastructure funds, PE firms and pension funds have been pouring billions into the data centre industry in recent years. The sector offers what few others can- mostly, stable cash flows combined with long-term growth potential.
It is worthy to note that the industry still faces many challenges, including energy and sustainability pressures, capital intensity and geopolitical complexities across jurisdictions. However, these barriers merely reinforce the value of platforms like AirTrunk, whose scale, operational excellence and regional diversification make it an attractive strategic asset.
Overall, the AirTrunk deal shows an important shift in how investors value digital infrastructure. Data centres are no longer viewed simply as real estate, but as critical infrastructure underpinning the digital economy- now being treated as a core long-term asset class rather than a niche opportunity. The transaction also reflects how data infrastructure has increasingly become a strategic asset with considerable geopolitical weight- shaping national and regional competitiveness, but also bringing questions regarding data sovereignty, energy security and regional control. Each of these parameters shapes how and where capital is- and will be- deployed in the future.
COMPANY OVERVIEW
After the analysis of the industry in general, let’s now focus on AirTrunk, which is a main player in the digital infrastructure market and was recently acquired by Blackstone and CPP Investments.
AirTrunk is headquartered in North Sydney and was founded in 2015 by Robin Khuda, who is still the CEO of the company. Even under the new ownership structure, Khuda continues to lead his company into its next stages, still holding a minority stake (CPP Investments, 2024). His goal is to create a new generation of hyperscale infrastructure that could handle the rapidly expanding cloud computing and data-intensive technologies in the APAC area.
The service AirTrunk provides is to create, construct and manage hyperscale campuses that provide for big techs, digital content platforms and cross-border cloud providers (“a platform for cloud, content, and large-enterprise customers across the Asia-Pacific & Japan region” – AirTrunk, n.d.). Its skills in providing dependable, energy-optimized and efficient data infrastructure have permitted the company to establish reliable and enduring relationships with the vast majority of its clients.
AirTrunk operates primarily in APAC regions, more specifically in Australia, Japan, Singapore, Hong Kong, and Malaysia, with additional land and resources that could support an additional 1 GW of expansion. These sites collectively represent over 800 MW of contracted capacity (Mergr, 2023). Its size and success position the company in a privileged spot at the forefront of global interest in data-driven infrastructure investments. AirTrunk is capable of realising new facilities cheaper and faster than traditional builders thanks to its advanced engineering model, based on modular design and rapid deployment.
From a financial standpoint, the business has recorded consistent growth. Although the company does not publish detailed financial statements, sector analyses estimate that it generated an EBITDA of approximately US $1 billion in FY2024 (implying an EV multiple of around 23x, according to Flux Finance, 2024).
AirTrunk is a prime example of how digital infrastructure has evolved into a crucial part of a long-term investment strategy. Bridging the gap between traditional assets and the technology influencing the economy of the future is the key to rapid expansion, methodical operations, and a financial foundation.
Exhibit 1
Capacity per Geographic Area (Data in MW)
Source: Airtrunk
DEAL RATIONALE
The strategic rationale behind the investment includes several geographical, financial, and timing aspects.
From a geographical point of view, for Blackstone and CPP, investing in AirTrunk means accessing a market with growth rates above the world average and with a severe shortage of installed capacity. The amount of created, consumed, and archived data, indeed, grew about 101x from 2010. Such exponential growth in data demand has far outpaced the expansion of data center infrastructure, leading to the current shortage of installed capacity across the region.
The acquisition also allows it to replicate the success of the QTS Realty Trust model, which Blackstone has already transformed into the world’s most dynamic data center platform.
From an operational perspective, the deal combines Blackstone and CPP’s financial and management capacity with AirTrunk’s industrial expertise, creating a scalable platform with over 1 GW of pipeline. Strategically, the transaction strengthens Blackstone’s presence in the Asia-Pacific region and consolidates its long-term vision: to build the physical foundations of the new global data and artificial intelligence economy.
The timing of the transaction is particularly significant. The wave of innovation in generative AI and the growing adoption of cloud computing are driving unprecedented structural demand for computing and storage capacity. AirTrunk, already the main Asian partner of the major global hyperscalers, therefore represents a strategic asset capable of directly benefiting from these megatrends.
Financially, the addition of Blackstone and CPP provides long-term capital, operational know-how, and privileged access to global customer and supplier networks, which are essential to support future expansion to a declared potential enterprise value of A$100bn.
Jon Gray, President and COO of Blackstone, stated: “[…] AirTrunk is another vital step as Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centers, power, and related services.”
Robin Khuda, Founder and CEO of AirTrunk, stated: “[…] We look forward to working with Blackstone and CPP Investments and benefitting from their scale capital, sector expertise, and valuable network across the various local markets […]”
POTENTIAL SYNERGIES AND RISKS
Through Blackstone’s acquisition of AirTrunk, its global digital infrastructure strategy will allow for the combination of strong leadership and significant expansion.
As a result of increasing AI investments and adoption of cloud computing, the Asia Pacific data centre market is projected to grow at around 12% through 2027/2028. AirTrunk is the largest hyperscale platform in the region with over 800 megawatts of operational capacity across key markets, and Blackstone’s $24bn acquisition, historically its largest investment in Asia-Pacific, highlights the scale and strategy of this deal. Yet there are risks involved in the transaction.
AirTrunk and Blackstone can both benefit from this deal in operations and strategy. Blackstone gains regional expertise and connections with hyperscalers like Amazon, Google, and Microsoft. AirTrunk benefits from more capital and global management experience. Both companies are large, creating synergy and new options for expansion. AirTrunk already has land for over 1 gigawatt of future growth. With extra funding from Blackstone, more development is possible. Blackstone owns QTS Realty Trust and invests in CoreWeave and Digital Realty.
With these companies collaborating with AirTrunk, skills can be transferred between the companies with mutual benefits. Blackstone also has a stake in Invergy, which means there is a possibility of renewable energy resources being used for the data centres, reducing energy demands. Together, these assets can create a vertically integrated system across data centres, energy, and AI.
This integration means that cost efficiency is improved, and the sustainability of the company also goes up, therefore reducing public pressures on data centre environmental impact. Additionally, by optimising performance, there will be faster, greener, and more reliable processing of data, meaning increased customer satisfaction and possibly market share, as this gives Blackstone and AirTrunk a unique competitive advantage: lower costs and cleaner energy.
The companies will benefit financially and in the market. The cost of capital will be lowered for AirTrunk due to Blackstone’s financial structure, meaning that project financing will become cheaper and more efficient. Through joint investment, there will be an increase in bargaining power for suppliers as well as clients, meaning they will have the ability to exploit economies of scale. Bulk buying of equipment lowers operating costs. Shared financing helps deploy new capacity more quickly across the region.
Yet there are risks imposed through this acquisition. In terms of regulation/political threats, the data laws are different across countries in which the firms operate, such as Japan compared to Malaysia; therefore, there could be issues between each country’s policies, creating barriers for the large levels of expansion that Blackstone is hoping for. Additionally, there is rising scrutiny over foreign ownership of digital infrastructure in the Asia-Pacific, which may be problematic for the two firms.
Data centres are extremely energy demanding, requiring large grids, which can create concerns about their environmental impact, meaning the companies will have limited ability to scale. Pressure is increasing against data centres and their negative environmental impact, meaning there could be possible backlash for excessive expansion and risk damage to their reputation. In terms of markets/financial issues, dependence on AI and demand for cloud could pose risks if sector growth begins to slow. Volatility in the interest rate may cause an increase in financing costs, affecting Blackstone/AirTrack as it raises the cost of debt, and leveraged buyouts will become less profitable, therefore increasing risk for projects and investments.
Overall, there are challenges posed by Blackstone’s acquisition; however, there is huge potential. With the synergy of the two companies’ respective portfolios, they can transform the data centre industry.
Bibliography
Merger (2023) AirTrunk – Company Profile. Updated 2023. Available at: https://mergr.com/company/airtrunk
AirTrunk (n.d.) About AirTrunk. Available at: https://airtrunk.com/about-airtrunk
CPP Investments (2024) Investment in Asia-Pacific Data Centre Operator AirTrunk. 4 September 2024. Available at: https://www.cppinvestments.com/newsroom/cpp-investments-announces-investment-in-asia-pacific-data-centre-operator-airtrunk
Flux Finance (2024) AirTrunk’s A$ 23.5 Billion Sale to Blackstone and CPP Investments. September 2024. Available at: https://www.flux.finance/post/airtrunk-23-5-billion-sale
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