- Apollo Global Management has agreed to acquire a majority stake in Stream Data Centers, marking its first direct acquisition in the booming data center sector.
- The deal positions Apollo to potentially invest billions in digital infrastructure, amid surging demand driven by AI and cloud computing growth.
- Stream’s management team will retain a minority interest, and the transaction is expected to close in 2025; terms were not disclosed.
Apollo Eyes AI-Led Growth In Digital Infrastructure
Apollo Global Management is entering the data center business, acquiring a majority stake in Texas-based Stream Data Centers, reports Bloomberg. Apollo’s move signals growing interest in digital infrastructure. Artificial intelligence and cloud computing are driving unprecedented demand for power-intensive facilities.
A First In Data Centers
This marks Apollo’s first majority investment in a data center operator. The asset manager has been actively investing in next-gen infrastructure. This deal gives it a direct footprint in a sector now essential to AI and digital economy growth.
Stream, which develops, leases, and operates large-scale data center campuses, has delivered over 20 campuses and will retain its leadership team through the deal. Its current pipeline includes projects in Chicago, Atlanta, and Dallas.
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Why It Matters
The acquisition aligns with Apollo’s broader strategy to expand in sectors tied to AI infrastructure. Analysts estimate this space will require over $3T in capital investment over the next three years.
Apollo President Jim Zelter highlighted AI infrastructure financing as a key opportunity during a recent earnings call. He stated that private capital will be vital to meeting the growing need.
The Race For AI Infrastructure
Apollo joins other major asset managers like Blackstone and Brookfield, which are also aggressively investing in digital infrastructure. Blackstone acquired QTS Realty Trust for $10B in 2021, while Brookfield recently announced a dedicated AI infrastructure development strategy.
Morgan Stanley projects an additional $200B in investment-grade bond issuance will be needed to fund AI-related infrastructure.
What’s Next
Apollo said the financing of long-term Stream projects could reach investment-grade status, allowing it to tap broader capital markets. The firm has already invested $38B in next-gen infrastructure since 2022. It recently acquired Argo Infrastructure Partners to expand its capabilities across renewables, digital, and transport sectors.
With this Stream deal, Apollo is setting the foundation for a long-term play in digital real estate. The strategy is driven by AI’s unrelenting appetite for space and power.
