The U.S. private equity group Blackstone is on the verge of acquiring the Sydney-based data center company AirTrunk. The deal, expected to cost 20 billion AUD (13.5 billion USD), underscores Blackstone's strategic bet on the rapid growth of cloud computing and artificial intelligence in the Asia-Pacific region.

In the final stages of negotiations, Blackstone is working with the Canada Pension Plan Investment Board to acquire AirTrunk from the asset management division of the Macquarie Group, according to two people familiar with the situation. If the deal goes through, it would be the largest transaction in Australia this year. In addition to Blackstone, a consortium consisting of Silver Lake and DigitalBridge also competed to purchase AirTrunk.

AirTrunk, founded in 2016 by Robin Khuda, a native of Bangladesh who immigrated to Australia at the age of 18, has quickly developed into a leading company in the region. With a total of eleven data centers in various Asian countries, the company is among the fastest growing technology companies in the region. Originally, AirTrunk had considered a possible IPO before the sales process began.

Macquarie, together with the Canadian pension fund PSP Investments, acquired 88 percent of AirTrunk in 2020, based on the expectation that the growth of AI would require significant investments in digital infrastructure. The deal at that time valued the company at 3 billion AUD.

Blackstone has significantly expanded its activities in the data center sector in recent years. The company possesses a portfolio of data centers worth USD 55 billion and plans to invest billions in further expanding capacities. According to Stephen Schwarzman, CEO of Blackstone, substantial investments in the development of new projects will continue to flow.

Analysts predict that the demand for data center capacity will increase by 160 percent by the end of the decade, driven by growing digitization and the rising demand for cloud and AI services. A growing market for data centers in Japan, where AirTrunk recently opened a new center outside Tokyo, is seen as particularly promising.

The increasing consolidation in the data center market is driven by high growth and long-term cash flows. Last year, AustralianSuper, Australia's largest pension fund, invested 2.5 billion AUD for a minority stake in Vantage Data Centers in Europe.

Blackstone and Macquarie declined to comment. AirTrunk did not immediately respond to requests.