KKR-Singtel consortium to take full control of STT GDC in S$13.8 billion data center deal

The lights never go off at a modern data center. Row after row of server racks hum in chilled rooms, drawing as much electricity as a small town to power the cloud services and artificial intelligence models that millions now use without thinking.

Deal terms and timeline

On Feb. 4 in Singapore, that hidden backbone of the digital economy changed hands again.

A consortium led by U.S. investment firm KKR and Singapore Telecommunications Ltd. said it has agreed to acquire full ownership of ST Telemedia Global Data Centres, or STT GDC, in a deal that values one of Asia’s largest data center operators at about S$13.8 billion (US$10.9 billion), including debt and committed capital spending.

Under definitive agreements signed with founding shareholder Singapore Technologies Telemedia Pte. Ltd., known as ST Telemedia, the consortium will pay S$6.6 billion in cash for the 82% of STT GDC it does not already hold. After the deal closes and earlier preference shares are converted, KKR is expected to own roughly 75% of the company and Singtel about 25%.

The transaction, announced Feb. 3 U.S. time and Feb. 4 in Singapore, is slated to complete by early in the second half of 2026, subject to regulatory and foreign investment approvals in multiple markets.

A bet on the infrastructure behind AI

For KKR and Singtel, the acquisition is a bet that demand for cloud computing and AI will keep climbing — and that the real winners of that boom will be the companies that own the physical infrastructure where all that data is stored and processed.

STT GDC, founded in 2014 and headquartered in Singapore, operates more than 100 data centers with about 2.3 gigawatts of design IT capacity. Its footprint spans roughly a dozen major markets, including Singapore, India, the United Kingdom, Germany, Italy, Thailand, South Korea, Indonesia, Japan, the Philippines, Malaysia and Vietnam.

In its core hubs, the company has built significant scale. In Singapore, it operates around six facilities with more than 110 megawatts of IT load. In Britain, its VIRTUS Data Centres unit runs 17 sites with more than 300 megawatts. In Germany, it controls 13 facilities exceeding 260 megawatts.

The company has also been leaning into fast-growing AI and cloud workloads. In India, STT GDC announced a US$3.2 billion program to add about 550 megawatts of capacity over five to six years, nearly tripling its footprint in what it calls one of its largest markets. In Southeast Asia, it has declared “AI-ready” data centers across all six major regional economies, with more than 500 megawatts of capacity operational or under construction and dedicated AI clusters live in Singapore and Thailand.

“Digital infrastructure remains one of the most compelling long-term investment themes globally as cloud computing and data-rich applications continue to reshape how data is created, stored and processed,” David Luboff, co-head of KKR Asia Pacific and head of its Asia Pacific infrastructure business, said in a statement announcing the deal. He called STT GDC “a rare opportunity to invest in a high-quality platform with a diversified footprint and significant growth pipeline.”

Strategic shift at Singtel—and an exit for ST Telemedia

For KKR, the deal is set to be one of its largest infrastructure investments in Asia. It builds on a string of digital infrastructure bets, including the 2021 acquisition of U.S. data center operator CyrusOne Inc. alongside Global Infrastructure Partners in a transaction valued at about US$15 billion, and a 20% stake in Singtel’s regional data center arm, now branded Nxera, in 2023.

Singtel, Southeast Asia’s largest telecom operator by market value, is deepening its role in the data center business as it tries to shift its earnings base away from traditional mobile and fixed-line services.

Last year, the group laid out a growth plan dubbed “Singtel28” that aims to make digital infrastructure — encompassing data centers, subsea cables and fiber networks — a new core profit engine. Its Nxera unit has said it is targeting about 200 megawatts of operating capacity by 2026 and 400 megawatts by 2028, including high-density, liquid-cooled facilities built for AI workloads in Singapore and a new campus in Johor, Malaysia, developed with Telekom Malaysia.

Arthur Lang, Singtel’s group chief financial officer, said the STT GDC deal is “a significant step towards scaling our new growth engine in digital infrastructure as mapped out in our Singtel28 growth plan.”

“By partnering KKR to invest further in STT GDC, we are strengthening our position as a global data center player with a diverse geographic footprint, complementing our Nxera platform,” he said in the same statement. Singtel has stressed that the acquisition will not alter its credit ratings or dividend policy, signaling it expects to rely on partnerships and capital recycling to fund expansion rather than overleveraging its own balance sheet.

The agreement also marks a turning point for ST Telemedia, a Temasek-linked investment company that founded STT GDC a decade ago and has backed its growth into a regional leader.

“As the data center sector has fundamentally shifted, its exponential trajectory now requires a different scale of capital and specialised focus for STT GDC’s next exciting phase of continued growth,” Stephen Miller, president and group chief executive officer of ST Telemedia, said. He described the sale as evidence of “strategic stewardship” that would allow the platform to continue expanding under new owners.

Regulatory scrutiny and energy constraints

The path to a full takeover began in June 2024, when a KKR-led consortium including Singtel invested S$1.75 billion in STT GDC through redeemable preference shares with detachable warrants, with the potential for an additional S$1.24 billion upon full warrant exercise. That deal provided growth capital to the company while leaving ST Telemedia as majority shareholder. The new agreement effectively crystallizes that earlier investment into full equity control.

Because STT GDC operates across Asia and Europe, the deal will have to clear competition and foreign investment reviews in several jurisdictions. In Singapore, where data centers are considered strategically important but also highly resource-intensive, the transaction will unfold against a tight policy framework.

The city-state imposed a pause on new data center approvals around 2019 because of concerns over power use and land constraints, before resuming approvals under a “Data Centre – Call for Application” scheme that strictly limits new capacity and requires facilities to meet tough energy-efficiency and sustainability standards. Authorities there have launched a Green Data Centre Roadmap and say Singapore now has more than 1,000 megawatts of data center capacity, with some of the lowest vacancy rates in the world.

Globally, data center power demand is rising quickly as AI workloads grow. The International Energy Agency has projected that electricity consumption by data centers and AI could more than double by 2030 to around 945 terawatt-hours a year, with AI-related demand alone more than quadrupling over that period. Separate research has found that data center growth is driving expansions in gas-fired power capacity in some markets, raising questions about how to meet climate targets while supporting digital growth.

Those pressures are particularly acute in dense, resource-constrained hubs such as Singapore. Operators building new capacity now face expectations to use more efficient cooling technologies, improve power usage effectiveness and increase their reliance on low-carbon energy, including imports of renewable power.

Beyond energy and climate issues, regulators and policymakers are also focused on who controls critical digital infrastructure and how it is governed. As private equity firms and infrastructure funds from the United States and Europe have taken ownership stakes in data center platforms worldwide, governments have strengthened foreign investment screening in sectors tied to national security and data sovereignty.

What happens next

For now, the KKR-Singtel consortium is emphasizing continuity. STT GDC’s management team, led by president and group CEO Bruno Lopez, is expected to stay in place, and the company has indicated it will continue pursuing its expansion plans in India, Southeast Asia and Europe.

The next milestones will be regulatory filings and financing arrangements, followed by decisions on how aggressively to build out the company’s development pipeline. Investors and policymakers alike will be watching how quickly new capacity is brought online, how it is powered and where future facilities are sited.

The acquisition underscores a broader shift in the AI era: as software developers and cloud providers race to launch new models and services, the most valuable assets may be the vast, power-hungry buildings where their data reside. With its S$13.8 billion bet on STT GDC, KKR, alongside Singtel, is positioning itself as one of the key landlords of that infrastructure in Asia.