DayOne Advances IPO Plans Amid Rising Investor Caution in Data Centers

Singapore-based data center operator DayOne is moving forward with its initial public offering, targeting a listing as early as November, according to multiple sources familiar with the plans. This comes at a time when rising interest rates and recent hurdles in the data center sector have created a more cautious environment for companies seeking to enter the public markets.

DayOne specializes in developing and managing data centers tailored for cloud computing and artificial intelligence (AI) applications. The company intends to file its registration statement with the U.S. Securities and Exchange Commission (SEC) in mid-October, with a potential market debut slated for the following month. However, insiders emphasize that these plans remain flexible and could change. DayOne has not provided any official comment on its IPO schedule.

The company's move contrasts with recent challenges facing peers in the data center industry. Notably, SB Energy, backed by SoftBank, postponed its IPO marketing efforts this week amid SEC inquiries and investor concerns about its valuation and dependence on OpenAI as a major client. Additionally, a legal dispute involving Oracle and Blue Owl threatens to delay a data center project in New Mexico. These developments illustrate the increasing scrutiny and evolving dynamics within the AI infrastructure space.

Investor interest now favors data center operators demonstrating diversified customer bases and secured revenue streams. Firms with active contracts and operational facilities tend to attract more favorable attention compared to those relying heavily on single customers or projects still in early development stages. Ke Yan, head of research at Singapore's Shenton Research, explained that the distinction hinges on whether demand is already contracted and generating energy or merely planned for the future.

Power availability has emerged as a critical factor for investors evaluating data center ventures. Operators that can guarantee a stable power supply, hold a significant proportion of contracted capacity, and maintain long-term take-or-pay agreements are viewed more favorably. This focus reflects the high energy demands of AI workloads, which require specialized infrastructure and consistent electricity access.

In addition to DayOne, several other data center companies are considering public listings. Switch, Vantage Data Centers, and CyrusOne have all indicated plans to explore or prepare IPOs. Switch has filed confidentially and is expected to launch its offering shortly after DayOne, according to sources. Switch did not respond to requests for comment.

DayOne distinguishes itself with a geographically diversified portfolio and operational data centers across Asia-Pacific and Europe. Its presence spans Malaysia, Hong Kong, Japan, Finland, and Spain, among other locations. The company secured approximately 2.1 gigawatts of capacity bookings and raised $4.5 billion in a Series C funding round completed in June. Industry reports suggest the IPO could raise up to $5 billion, valuing DayOne around $20 billion. Backers include investment firms Coatue and Hillhouse.

Meanwhile, SB Energy’s delayed IPO has drawn attention due to its close ties with OpenAI and Nvidia. Nvidia has committed to a guarantee of up to $105 billion to support OpenAI's leasing of a data center in Ohio developed by SB Energy and invested $1.5 billion in the company. SoftBank, a major OpenAI backer, is also seeking to raise $10 billion through a debt issuance aimed at financing its OpenAI-related investments.

The financial demands of building AI-capable data centers are substantial. Higher interest rates increase borrowing costs for facilities that may take years to generate returns. As a result, investors are demanding clearer visibility on customer contracts and cash flows to mitigate risk. Neil Bear-Hetherington, director of data center capital markets for Asia Pacific at CBRE, noted that contracted revenue from creditworthy clients is essential to support debt service for expensive AI-ready infrastructure such as high-density racks and liquid cooling systems.

For data center developers, securing financially strong customers is becoming a key consideration for investors assessing projects that require billions in upfront capital. The current market conditions and investor caution have prompted companies preparing for IPOs to act swiftly while demand remains, as delays could increase uncertainty and financing costs.

Ke Yan of Shenton Research emphasized the urgency, stating that uncertainty negatively impacts data center business models by raising debt costs and delaying the infrastructure necessary to support growth. Investors seek a balance of yield and expansion potential, and uncertainty threatens both.

As DayOne proceeds with its IPO plans amid a challenging backdrop, its ability to demonstrate operational readiness, diversified clientele, and secured power supply will be critical factors in attracting investor interest in a sector undergoing careful reappraisal.