Princeton Digital Group is seeking a $1.2 billion loan for its Malaysia data center

Princeton Digital Group, a Singapore-based data center operator, is seeking a US$1.2 billion loan to finance its Malaysia expansion, according to a source familiar with the matter. The three-year loan, to be arranged by HSBC Holdings Singapore, Maybank Investment Bank, OCBC Bank, Standard Chartered Bank, and United Overseas Bank, will be used to fund an 198.8MW data center campus in Johor, Malaysia, and to refinance existing debt.

Standard Chartered declined to comment, while Princeton Digital Group, HSBC, Maybank, OCBC Malaysia, and UOB did not immediately respond to requests for comment. The loan follows a pattern of borrowing by data center firms to capitalize on growing artificial intelligence demand. Moody's predicts at least US$3 trillion in data center investments over the next five years, with debt playing a significant role in financing.

However, signs of caution are emerging as global investors question the valuation of AI stocks, as evidenced by Nvidia-backed Firmus Grid's aborted IPO. Princeton Digital's parent company, Warburg Pincus, is among the primary investors, along with Stonepeak Partners, Abu Dhabi sovereign fund Mubadala Investment, and Ontario Teachers' Pension Plan Board.