AI Boom Sparks $2 Billion Bet on DataBank Led by Australian Pension Fund

(Bloomberg) -- Data center developer DataBank has raised $2 billion to build three facilities planned across the US, the latest sign of superheated investor interest in artificial intelligence.

AustralianSuper, the country’s largest pension fund, led the raise with $1.5 billion. It will become a minority owner of DataBank and appoint a director to the company’s board. DigitalBridge, which also participated in the raise, is already DataBank’s control investor and appoints the majority of the company’s board of directors. 

The AI gold rush has sparked a boom in data center proposals — and raised concerns about the electricity needed to operate them. But to access the energy to train and run powerful AI models, data center developers need to show they have the financial backing to put steel in the ground, said Raul Martynek, DataBank’s chief executive officer.

“You have to make significant commitments to procure the power,” he added. “Utilities are very focused on making sure any expenditure they make is recovered from a ratepayer perspective.”

DataBank plans to construct three new facilities in established data center hotspots: a 480-megawatt campus in south Dallas, a 192-megawatt campus in Culpeper, Virginia, and a 120-megawatt campus in Atlanta. (One-thousand megawatts is roughly the output of a nuclear reactor and can power about 750,000 homes.) Those three facilities, when completed, will triple the amount of power the company currently consumes. The $2 billion raise fully funds DataBank’s plans to build the new data centers, Martynek said. 

AustralianSuper has shown an increasing appetite for private market deals. It’s one of several Australian pension funds growing an offshore footprint, and about half of the pension industry's money is invested outside the country. AustralianSuper also moved its global head of private equity to New York in 2022 and is expanding its team there as part of its broader plan to access private markets. The fund’s global real assets portfolio now totals nearly $40 billion and includes digital infrastructure assets across areas including Australia, Europe and South America.

This raise brings the total invested in DataBank to more than $4 billion over the past year, coming after a $725 million credit facility announced in April 2024, a $456 million securitization completed in February 2024, and a $533 million debt and equity investment made in late 2023. DataBank is a private company and didn’t disclose its valuation in the latest fund raise. 

AustralianSuper's investment in DataBank will capitalize on “unprecedented demand for cloud and AI infrastructure” and will diversify the fund's exposure to digital infrastructure around the world, Derek Chu, the fund's head of American real assets, said in a statement.

Martynek also said that by focusing on established data center markets, DataBank will ensure its facilities are in demand for cloud and enterprise computing even if the AI craze cools off. “We love the tailwinds that AI is driving, but we also feel that those locations are extremely well positioned to support any of the other technology trends,” he said. 

(Updates with additional comment in penultimate paragraph. An earlier version corrected date of move in sixth paragraph)

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