Wall Street Grows Increasingly Skeptical of AI Data Centers; IPO Delays Mount

[Financial News]  Opposition to data center construction, which has emerged as a public backlash and political issue across the United States, is now spreading to Wall Street. 
The New York Times (NYT) reported on the 21st local time that companies operating data centers, along with power and site suppliers, had been expected to lead the initial public offering (IPO) market in the coming months. However, growing investor skepticism is disrupting fundraising plans worth tens of trillions of won.
SB Energy, a subsidiary of SoftBank Group that is pursuing the construction of what would be the world's largest data center in Ohio, postponed its IPO from this month until next month or later. Investors have questioned the company's proposed valuation of more than $50 billion, or approximately 67 trillion won, making it difficult to secure demand for its shares.
Holtec International, a nuclear power technology company, also announced last week that it was suspending its IPO plans indefinitely, citing uncertainty surrounding data center development. The company had planned to raise up to $900 million through a Nasdaq listing, but said, "Investor confidence in the new-issue market has been damaged," explaining the reason for the delay. Aggreko, a power company whose key customers include AI data centers, is also slowing its listing process due to uncertainty in the data center industry, higher interest rates and concerns about the economy.
This slowdown is creating headwinds for the AI industry. Residents, particularly in rural areas of the United States, have been mounting fierce opposition for months as massive data centers that consume enormous amounts of power continue to spring up.
Ahead of the upcoming U.S. midterm elections, the data center issue has emerged as a major source of voter frustration across both parties. State governments are also introducing measures to regulate data center development, hindering companies seeking to raise funds. Skepticism toward AI has intensified further as industry leaders have recently warned of the technology's risks and discussed slowing the pace of development.
Industry experts, however, believe the current difficulties could represent a temporary pause in the fundraising process. According to major investment institutions such as PIMCO, the cost of building AI infrastructure alone is estimated to exceed $5 trillion, or approximately 6,700 trillion won, by 2030.
In fact, Anthropic, a leading AI startup that uses large-scale data centers, is maintaining its goal of going public this fall. Big tech companies including Meta, Alphabet, Amazon, Microsoft and Oracle have also already announced infrastructure investment plans exceeding $1 trillion.
Tomasz Tunguz, a partner at Theory Ventures, said, "Given the enormous scale of AI infrastructure projects, it is inevitable that companies will tap major capital markets."
Experts expect investor sentiment to diverge depending on the performance and operational capabilities of companies pursuing IPOs. Unlike companies such as Vantage Data Centers and CyrusOne, which have built more than 25 data centers, firms still in the early stages of their businesses and facing high execution risks are likely to face stricter scrutiny from Wall Street, NYT reported.
[email protected] Yoon Jae-jun Reporter