Abu Dhabi-backed artificial intelligence investor MGX has been exploring buying Singapore-based data centre operator DayOne, three sources said, in what would mark a major step in its global expansion into the technology.
MGX has been working with an investment bank in preparation for the potential transaction, said two of the sources, who declined to be identified because the discussions are confidential.
DayOne has been planning a U.S. initial public offering targeting a valuation of $20 billion, Reuters has reported, a price that MGX may not be willing to match, two of the sources said.
The sources cautioned that a deal may not proceed and that the firm may still opt to pursue an IPO.
A spokesperson for MGX declined to comment.
DayOne didn't immediately respond to requests for comment.
DayOne, which is affiliated with China's GDS Holdings, operates and develops data centres across Southeast Asia as well as in Hong Kong, Japan and Finland. Reuters reported last month that it was considering a dual initial public offering in Singapore and the US, though the Singapore plans are not concrete at this stage.
DayOne has secured investments from US investor Coatue Management, SoftBank Vision Fund and Citadel Securities founder Ken Griffin.
Eastward expansion
A deal for DayOne could mark MGX's first acquisition in Asia as the company pursues a lightning-fast international expansion. It was set up a little over two years ago with the $385 billion sovereign wealth fund Mubadala and AI company G42 as its founding partners.
MGX falls under the purview of Sheikh Tahnoon bin Zayed Al Nahyan, the United Arab Emirates' national security adviser and brother of the president.
MGX is targeting over $100 billion in assets investing across the whole AI chain, including data centres and the powerful chips that power them, as the UAE pours billions into the sector as part of its economic diversification efforts.
The firm has invested in some of the largest AI companies globally including SpaceX's xAI, OpenAI and Anthropic as well as in Aligned Data Centers through a $30 billion AI infrastructure fund that includes BlackRock and Nvidia.
Separately, it has also acquired a 15% stake in TikTok's US operations and invested $2 billion for a minority stake in the world's largest crypto exchange Binance.
