Global private equity fund Apollo announced on Wednesday an agreement to acquire a majority stake in Stream Data Centers, a Dallas-based builder of \u201chyperscale\u201d data centers. <\/p>\n
Financial terms of the deal were not disclosed, but Apollo stated the agreement with SDC will enable the firm \u201cto potentially deploy billions of dollars into next-generation digital infrastructure.\u201d<\/p>\n
Apollo, the fourth-largest alternative asset manager in the world with more than $800 billion in assets under management, now follows in the footsteps of fellow investment giants like Blackrock<\/a> by getting in on the rapidly growing demand for digital infrastructure. <\/p>\n The firm estimates \u201cseveral trillion dollars of investment\u201d are needed over the next decade to meet data center demand, powered by rising energy usage, artificial intelligence and semiconductors. <\/p>\n Business Briefing<\/p>\n Apollo expects to scale its investments in this infrastructure through Stream, and other investments. It has already deployed about $38 billion into renewable energy, compute capacity and related areas since 2022.<\/p>\n Related:D-FW data center construction grows to meet record demand<\/a><\/p>\n \u201cWith deep development expertise and a valuable long-term land fund in key growth markets, we believe [Stream] is uniquely positioned to serve the infrastructure needs of the world\u2019s most sophisticated technology customers,\u201d Apollo partners Joseph Jackson and Trevor Mills said in a release<\/a>.<\/p>\n Stream was founded in 1999, and now has active site selection in 25 states. In Texas, it has developed 14 data center projects<\/a>, ranging from in-development sites to working data centers sold to major companies. <\/p>\n Capital from Apollo will speed the development of 650 megawatts of power capacity across campuses in areas like Chicago, Atlanta and Dallas.<\/p>\n Stream\u2019s management team will maintain a minority interest in the company and continue leading the business, according to the release. Other terms of the deal were not disclosed.<\/p>\n \u201cThis symbiotic relationship with Apollo amplifies [Stream\u2019s] existing strength, offering access to the capital required to significantly scale our developments at the rate hyperscale customers demand,\u201d Stream co-managing partners Michael Lahoud and Paul Moser, said in a statement.<\/p>\n Data centers could strain Texas\u2019 infrastructure<\/p>\n The data center industry is booming across the Lone Star State, but it poses challenges to the power grid. <\/p>\n Texas is unique in having a grid that is independent from the rest of the country, and University of Houston researchers estimated<\/a> recently that the state\u2019s electricity needs could double by 2035, thanks in part to data center expansion. <\/p>\n The researchers also predict data center growth could strain water resources, with a state-wide water deficit reaching 3,600 million cubic meters \u2014 about 3 million acre-feet \u2014 by 2035.<\/p>\n And because data centers tend to be built away from population centers, meeting these infrastructure demands could pose problems. <\/p>\n