Market sell-off, rising rates test AI data centre deal boom
Pulled listings signal tougher funding conditions; investors question valuations as borrowing costs rise
Rising borrowing costs and investor concerns over valuations are impacting the global artificial intelligence boom, particularly in the infrastructure sector. Companies racing to build AI data centers are facing tougher funding conditions, leading to delays in fundraising plans and increased borrowing costs. Recent listings for AI-related companies, such as Blackstone-backed AirTrunk Reit, Nvidia-backed Firmus, and SoftBank-backed SB Energy, have been pulled or paused as investors reassess whether these businesses can generate returns that justify escalating spending on computing power, land, and energy.
Despite these challenges, the sector still sees strong deal activity and record mergers and acquisitions, totaling US$21.3 billion in the last week of October 2025 alone. Investors are increasingly focused on quality and execution risk, recognizing that valuations based on existing customer contracts may be more reliable than future projections.
Major transactions, such as Singapore-based DayOne's expected IPO and AirTrunk's potential sale, continue to proceed, but investors are discerning about valuations, leverage, and business models.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
