Vantage Data Centers Experienced Unprecedented Growth in 2023 Driven by AI and Cloud Demand Globally; Secured $10 Billion in Incremental Funding

Rhea-AI Summary

Vantage Data Centers raised a record $10 billion in incremental debt and equity financing in 2023 to support the growing demand from the world’s largest hyperscalers. They entered two new markets, broke ground on seven campuses, and opened 10 facilities across the globe. The company leveraged these new investments to serve customers in key markets, supporting the development of digital infrastructure and technology hubs globally. The capital influx came as demand for hyperscale cloud services and generative artificial intelligence soared, with projections expected to reach $535 billion by 2028. Vantage secured more than $10 billion in incremental capital from new and existing investors in 2023, with additional investments planned for 2024.

Positive

• Record $10 billion in incremental debt and equity financing raised in 2023
• Entered two new markets, broke ground on seven campuses, and opened 10 facilities across the globe
• Leveraged new investments to serve customers in key markets
• Secured more than $10 billion in incremental capital from new and existing investors in 2023

Negative

• None.

Insights

Market Research Analyst

The significant capital infusion of $10 billion into Vantage Data Centers underscores a robust confidence in the data center industry, reflecting a broader trend of digital infrastructure investment. The strategic expansion into London and Taipei is particularly noteworthy, as these regions are recognized for their technological growth and the increasing demand for cloud services and data processing capabilities. The entry into these markets suggests a calculated move to tap into the burgeoning needs of both local businesses and global enterprises operating in these areas.

Moreover, the groundbreakings of seven campuses and the opening of 10 facilities globally indicate aggressive growth and the company's commitment to scaling operations to meet the hyperscale demand. This expansion aligns with the projected increase in cloud services, which is expected to reach $535 billion by 2028. It also correlates with the anticipated growth in generative AI, which could see a market size of $1.3 trillion by 2032. These figures not only highlight the potential for Vantage Data Centers but also for the industry at large, which could see increased investment and competition as a result.

Financial Analyst

The announcement of Vantage Data Centers' $10 billion in financing is a clear indicator of the company's financial health and its investors' belief in its growth trajectory. The use of this capital for expansion purposes is a strategic move that can be expected to yield significant returns in the form of increased leasing and service offerings. The investment in the data center market, which is underpinned by the exponential growth in cloud computing and AI, has the potential to offer robust returns given the sector's critical role in the tech ecosystem.

From a financial perspective, the scale of investment and the speed of execution in opening new facilities are indicative of an aggressive growth strategy. This strategy is not without risks, as it hinges on continued demand for data center capacity and the ability to effectively manage rapid expansion. However, the long-term job creation and infrastructure development, such as in Quincy, WA and Phoenix, AZ, also reflect a positive impact on local economies, which can foster goodwill and potentially lead to favorable regulatory conditions.

Economist

The expansion of Vantage Data Centers into new markets and the rapid development of new facilities have significant implications for the global economy. The creation of high-pay jobs and the generation of tax revenue, as seen in Quincy, WA, are indicative of the positive externalities associated with such capital-intensive projects. These developments can act as catalysts for further economic growth in the regions, attracting ancillary businesses and fostering a technology-friendly environment.

The investment in data centers also speaks to the broader economic trend of digital transformation, where businesses across various sectors are increasingly reliant on cloud services and data analytics. This reliance is expected to grow as AI and other innovative technologies advance, suggesting that Vantage Data Centers' strategic roadmap is aligned with these macroeconomic trends. The company's ability to meet the rising demand could further solidify its position in the market and contribute to economic stability through diversification of services and geographic presence.

Company accelerated its expansion roadmap, entering two new markets, breaking ground on seven campuses and opening 10 facilities across the globe

DENVER--(BUSINESS WIRE)-- Vantage Data Centers, a leading global provider of hyperscale data center campuses, today announced the company raised a record $10 billion in incremental debt and equity financing throughout 2023 to support the growing demand from the world’s largest hyperscalers. The capital raised supported record leasing, expansion into two new markets and the groundbreakings of seven campuses across North America, EMEA and APAC.

In 2023, Vantage Data Centers entered two new markets (London and Taipei), broke ground on seven campuses and opened 10 facilities across the globe. Pictured is a rendering of the company’s LHR1 London campus that will include 55MW across two data centers. (Photo: Business Wire)

Throughout 2023, Vantage leveraged these new investments to serve customers in key markets, supporting the development of digital infrastructure and technology hubs globally. Driving the expansion of the company’s international platform, this influx of capital came as demand for hyperscale cloud services and generative artificial intelligence (AI) soared, with projections expected to reach $535 billion by 2028, according to Structure Research, and $1.3 trillion by 2032, according to Bloomberg Intelligence, respectively.

“In 2023, we entered emerging and high-demand data center markets to meet the needs of our customers as artificial intelligence and other innovative technologies continue to advance,” said Sureel Choksi, president and CEO of Vantage Data Centers. “By aligning our strategic roadmap with our customers’ needs and forging partnerships with leading international investors, we continued our rapid growth in 2023, and we will continue to build on this momentum in 2024 and beyond.”

Capital Investments

To support the ongoing development of Vantage’s global data center platform, the company secured more than $10 billion in incremental capital from new and existing investors in 2023 with additional investments planned for 2024.

“It has been an exceptional year for Vantage’s growth with unprecedented demand for data center capacity around the globe, underpinned by the significant funding from our investors. In 2023, we more than tripled last year’s investments, enabling us to ramp up our plans to deliver even more capacity for customers,” said Sharif Metwalli, CFO at Vantage Data Centers. “We appreciate the trust, confidence and support of our equity and debt investors, and look forward to continuing these partnerships to create additional value for all Vantage stakeholders.”

In 2023, Vantage entered the London and Taipei markets, in addition to breaking ground on seven campuses across North America, EMEA and APAC, and opening 10 new data centers globally. Select highlights include:

North America

• Quincy, WA: Vantage delivered its third and final facility on its 89MW WA1 campus in Quincy, Washington. Since entering the market in 2011, Vantage has invested more than $1 billion into the campus and created hundreds of long-term, high-pay jobs. The tax revenue generated by Vantage has contributed to the development of a new modern hospital and a state-of-the-art high school.
• Phoenix, AZ: Vantage celebrated the topping out of Phase II construction on its $1.5 billion, 176MW AZ1 campus in Goodyear, scheduled to be operational in spring 2024. The construction and operation of the facility is expected to create about 3,000 jobs.

EMEA

• London: Vantage entered the Tier 1 London market with a £500 million investment to support the construction of a 55W campus, followed quickly by the announcement of an additional £250 million investment for the development of a second, 20MW campus.
• Cardiff: The company opened a second, 40MW facility on its Cardiff campus in the summer of 2023.

APAC

• Cyberjaya: Vantage announced its intention to invest an additional $3 billion to support the development of a second, 256MW campus and a fourth, 16MW facility on its KUL1 campus.
• Taipei: Vantage entered the Taipei market, with a 16MW data center.

Leadership Appointments; Environmental, Social and Governance (ESG) Initiatives

• Leadership Appointments: In support of the company’s growth in Asia Pacific, Vantage appointed Raymond Tong as president, APAC and Joel Cheah as CFO, APAC. In addition, the company named Gregory Thompson Jr. as its inaugural chief information security officer. Vantage also welcomed nearly 300 new team members, bringing the company’s total number of global employees to more than 1,300.
• Second Annual ESG Report: Themed “A Global Vision. Locally Adapted,” Vantage published its second annual ESG report underscoring the company’s environmental stewardship, social responsibility and ethical governance.
• Environmental Impact: Vantage continued to execute on its commitment to reach net zero carbon emissions by 2030, including the deployment of hydrotreated vegetable oil (HVO), a renewable fuel to replace conventional diesel fuel in generators, at its campuses in Cardiff, Wales, and Santa Clara, California.

Entering 2024, Vantage is poised for strong performance, starting the year with 32 campuses spanning five continents, 13 countries and 19 markets with IT capacity that will surpass 2GW once all campuses are fully developed. Earlier this month, the company announced a $6.4 billion equity investment led by investment vehicles managed by DigitalBridge Group, Inc. (NYSE: DBRG) and Silver Lake to support the development of additional data center campuses across North America and EMEA.

About Vantage Data Centers

Vantage Data Centers powers, cools, protects and connects the technology of the world’s well-known hyperscalers, cloud providers and large enterprises. Developing and operating across five continents in North America, EMEA and Asia Pacific, Vantage has evolved data center design in innovative ways to deliver dramatic gains in reliability, efficiency and sustainability in flexible environments that can scale as quickly as the market demands.

For more information, visit http://www.vantage-dc.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240131123978/en/

Mark Freeman

Vantage Data Centers

mfreeman@vantage-dc.com

+1-202-680-4243

Robin Bectel

REQ for Vantage Data Centers

vdc@req.co

+1-202-936-6335

Source: Vantage Data Centers

FAQ

What was the amount of incremental debt and equity financing raised by Vantage Data Centers in 2023?

Vantage Data Centers raised a record $10 billion in incremental debt and equity financing in 2023.

How many new markets did Vantage Data Centers enter in 2023?

Vantage Data Centers entered two new markets, London and Taipei, in 2023.

How many campuses did Vantage Data Centers break ground on in 2023?

Vantage Data Centers broke ground on seven campuses across North America, EMEA, and APAC in 2023.

How many facilities did Vantage Data Centers open across the globe in 2023?

Vantage Data Centers opened 10 new facilities globally in 2023.

What was the projected demand for hyperscale cloud services by 2028?

The demand for hyperscale cloud services is projected to reach $535 billion by 2028.

What was the amount of incremental capital secured by Vantage Data Centers in 2023?

Vantage Data Centers secured more than $10 billion in incremental capital from new and existing investors in 2023.