Analysis-Market selloff, rising rates test AI data centre deal boom

The AI data centre boom is facing challenges as market selloffs and rising interest rates force companies to delay fundraising plans or pay more for capital. Investors are demanding proof that companies can absorb higher interest rates and computing-power costs, leading to a sharper focus on quality and business models. While deal activity is expected to hold up through next year, equity capital market fundraising for the sector has declined by 4.6% compared to the same period in 2025.

The shift in investor sentiment is evident in the recent setbacks for listings of AI-related companies, with some pulling or pausing their listings due to concerns over revenue projections and debt burdens. Despite the challenges, M&A involving Asian data centres is still on track for a record year, highlighting the sector's resilience.

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