By Investing.com — Data center operator Switch (NYSE:SWCH) is in discussions over a potential initial public offering (IPO) that could value the busienss at around $40 billion, including debt, Reuters reported on Tuesday.
Citing people familiar with the matter, the news agency said that the talks were at an early stage and could be subject to market conditions. No final decisions have been taken, Reuters added.
A group of investment firms that own Switch have been holding preliminary negotiations with investment bankers regarding a possible stock flotation as soon as 2025, the sources told Reuters.
Switch, a Las Vegas-based firm that counts artificial intelligence-darling Nvidia (NASDAQ:NVDA) among its biggest customer, was taken private by IFM Investors and DigitalBridge for $11 billion in 2022. Aware Super, an Australian pension fund, later purchased a minority stake in 2023.
The talks come during a time of surging market interest in the applications of AI, a trend that has fueled demand for the infrastructure — including data centers — needed to power the nascent technology.
Deal flow around data center and server businesses has subsequently expanded. In August and September alone, Blackstone (NYSE:BX) has inked a deal for Australian data center firm Air Trunk, while chipmaking giant Advanced Micro Devices (NASDAQ:AMD) has acquired server manufacturer ZT Systems. Combined, the deals were worth more than $20 billion.
Founded in 2000 by tech entrepreneur Rob Roy, Switch has said it is “driven to build the most efficient data centers that can respond to the most advanced requirements from high transaction workloads through to high-performance computing,” according to the company’s website.
The focus on renewable technology could enhance Switch’s attractiveness to tech firms, Reuters said. Earlier this month, Morgan Stanley research showed that the surge in data centers is projected to produce around 2.5 billion metric tons of carbon dioxide-equivalent emissions globally through the end of the decade.