Artificial intelligence data center operator Switch Inc. has obtained $2.6 billion in committed financing from a consortium of banks to support the continued expansion of its data center assets. This move represents another significant capital markets action for the company following its decision to abandon comprehensive acquisition talks with SoftBank.
Prior to this, Switch Inc. recently completed an asset-backed securities (ABS) issuance of approximately $768 million. This offering securitized its data center in Reno, Nevada, which spans about 1.4 million square feet and possesses over 52 megawatts of capacity. Since the beginning of 2024, the company has raised a total of roughly $4.2 billion through five ABS issuances. Its securitized asset portfolio now encompasses 11 data centers across five markets in the United States.
In related developments, SoftBank Group had previously engaged in negotiations for a comprehensive acquisition of Switch Inc. valued at around $50 billion, but those talks were suspended in January of this year. SoftBank founder Masayoshi Son had initially aimed to gain direct control of Switch Inc.'s energy-efficient data center network to supply computational power for his $500 billion "Star Gate" artificial intelligence infrastructure project. According to informed sources, Son conceded earlier this month that a full acquisition was not feasible; however, both parties continue to actively discuss possibilities for a partial investment or other forms of collaboration.
Concurrently, SoftBank completed the acquisition of New York-listed investment firm DigitalBridge Group for $3 billion at the beginning of this month. DigitalBridge Group holds a majority stake in Switch Inc. Previously, shareholders of Switch Inc. had contemplated an initial public offering that could value the company at approximately $60 billion, including debt.
Analysts point out that against the backdrop of continuously growing demand for AI computing power, financing activities within the data center sector are becoming increasingly active. Switch Inc.'s latest financing initiative reflects strong market demand for assets in this field.
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