AI caution favours old-school data centre builder

Oracle

13/10/2026 04:41

The author is a Reuters Breakingviews columnist.  The opinions expressed are her own. Refile to add space between the first two sentences in last paragraph
By Robyn Mak
HONG KONG, Oct 13 (Reuters Breakingviews) - Factories, even for artificial intelligence, need not be complicated. Take Singapore-based DayOne Data Centers, which constructs and leases out such buildings to cloud computing providers and AI firms. Its straightforward business model, track record and firm delivery times are a contrast to upstart neocloud Firmus Technologies, which last week abandoned its listing on weak investor demand. That puts DayOne's upcoming US IPO on more solid footing.
The company, which is looking to raise $5 billion at a $20 billion valuation, used to be the international arm of China's $6 billion GDS 9698.HK before it separated and rebranded. That helps explain how it already touts a foothold in the so-called SIJORI hub - a massive cluster of data centres spanning Malaysia, Indonesia, and Singapore. The company's capacity there topped 862 megawatts as of September and is set to almost double. To compare, Australia's Firmus has just 42 megawatts of its hoped-for 1 gigawatt of capacity up and running.
True, both are exposed to similar risks. Revenue concentration, for instance, is a major red flag. Almost all of Firmus' $13 billion of projected revenue comes from just two companies, AFR reported in April. Meanwhile, DayOne depends on one customer - most likely China's ByteDance, based on descriptions of the client in its prospectus - for 69% of its first-half sales. The TikTok-owner's Chinese roots add another layer of uncertainty: US legislation to restrict companies from the People's Republic from accessing high-end chips via overseas data centres is currently making its way through Washington.
Losing its top AI customer could be catastrophic for DayOne, which has yet to turn a profit. But US titans may be more than happy to take its place: Amazon.com AMZN.O, Alphabet's Google GOOGL.O, Microsoft MSFT.O and Oracle ORCL.N are aggressively expanding in Asia, with committed investments topping $160 billion between January 2024 and May 2026, McKinsey estimates. That's due to booming demand in the region for not only AI but also traditional computing and storage services.
Crucially, DayOne is confident that it can fund and deliver substantially all of the 2.3 gigawatts of capacity committed by customers by 2028. The Company says it can construct a data centre within 12 months and for up to 30% cheaper than the industry average. Indeed, the words "faster and cheaper" may resonate with investors far more than grand ambitions like those of Firmus. 
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CONTEXT NEWS
Singapore-based DayOne Data Centers on October 6 filed for a New York initial public offering. The company may seek to raise as much as $5 billion at a $20 billion valuation, Reuters reported in February.
DayOne had 962 megawatts of capacity in service as of September 20, 2026, and is actively constructing an additional 962 MW of capacity across six markets, according to its prospectus.
For the six months ended June 30, revenue was $512 million, compared to $151.5 million a year ago. Malaysia accounted for 87% of the total, while its top two customers accounted for 84.3% of the total. The company also said its top customer is a "global technology company with a leading short-form video platform serving a worldwide audience". 
China's ByteDance and Oracle are DayOne's top two customers, research group SemiAnalysis said in June 2025.

(Editing by Una Galani; Production by Eileen Soreng and Aditya Srivastav)
((For previous columns by the author, Reuters customers can click on MAK/  robyn.mak@thomsonreuters.com))