While NextDC reels from a costly delay to a flagship campus, Robin Khuda‘s AirTrunk has secured a fresh batch of billions.
AirTrunk says it plans to spend a staggering $75 billion on AI infrastructure in Australia over the next decade. On Tuesday it announced it had secured just over five per cent of that in the form of $4.25 billion in debt.
National Australia Bank, ING and Deutsche Bank were among the 14 underwriters of the debt, which will go the “SYD3” 400 MW data centre campus in Western Sydney that AirTrunk hopes will be completed by the middle of 2028.
SYD3 was initially announced by AirTrunk in 2021 as a 320-plus MW development, eventually upgraded to pack an extra 80 MW of punch. To put the total 400 MW scale in perspective, represents a quarter of the estimated 1.6 GW capacity currently operational in Australia.
AirTrunk’s announcement comes as rival data centre builder NextDC navigates an investor revolt and uncertainty around its access to billions of debt finance.
Citing “community and stakeholder opposition,” electricity provider Jemena last week delayed grid upgrades required to power NextDC’s M3 data centre in West Footscray, Victoria. NextDC was then forced to revise net revenue for the current financial year down by over 20 per cent, to between $475 million and $500 million, causing its stock to plummet 40 per cent.
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On Monday the company told investors that chairman Douglas Flynn would step down and CEO Craig Scroggie would no longer receive bonuses for the financial year. NextDC has told investors that the hit it will take to contracted revenue – hundreds of millions of which was riding on M3 – may impact its ability to access all of the $8.75 billion debt facility it had established.
Data centres like SYD3 and M3 designed to satisfy the seemingly insatiable appetite OpenAI, Anthropic, Google and other AI developers have for computing power. But to secure and realise multi-billion dollar contracts with tech titans requires enormous capital expenditure, the majority of which is raised via debt.
Acquired by Blackstone in 2024 for $24 billion, AirTrunk says its total debt financing has now hit $38.4 billion. Around half of that,$19.8 billion, is for its Australian projects. Among AirTrunk’s other mega projects is a 354 MW centre MEL2 in Melbourne. It also has two campuses in Malaysia, totalling 420 MW between them, which it says are nearly 100 per cent contracted out.
Yet there are fears that a combination of rising interest rates and community backlash will imperil this buildout. Rising rates make debt more expensive, while local councils resisting data centre construction has caused both delays, as in NextDC’s M3, and the outright scrapping of projects. Goodman Group recently cancelled a $1.2 billion facility in Sydney’s Lane Cove for that reason.
AirTrunk this month reportedly delayed the IPO of a real estate investment trust (REIT) in Singapore a broader AI stock selloff.
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