According to people with direct knowledge, DayOne Data Centers Ltd. and several banks have held early-stage discussions over the past few weeks about a bond sale of roughly $500 million. The Singapore-based operator intends to keep the conversations going, and the proceeds would be used for project financing, though the specific projects were not disclosed. Citigroup Inc. is the lead arranger, and the company could seek orders as soon as next year. DayOne and Citigroup spokespeople declined to comment.
Earlier this week, DayOne filed for a US IPO and has been considering raising around $5 billion. The debt talks continue even after a development partner, Nvidia Corp.-backed Firmus Grid Ltd., dropped plans for an Australian listing this week. Money raised from Firmus's deal was slated to purchase graphics chips for its inaugural data center project in Batam, Indonesia, a site it is developing with DayOne under an eight-year partnership with Nvidia. Bloomberg News reported, citing people familiar, that Firmus is now exploring a private round of up to $3 billion.
DayOne has already completed 50% of a $7 billion-equivalent loan, among Asia's biggest AI-related financings, with participation from over 30 lenders. An upsized portion totaling $3.7 billion-equivalent was split into 5.5 billion ringgit ($1.3 billion) and a $2.4 billion tranche. The company is additionally pursuing a HK$1.86 billion ($237 million) loan tied to a Hong Kong data center, and in August secured a four-year S$530 million ($414 million) facility to finance its initial buildout in Singapore.
Bond markets are becoming the main funding route for AI infrastructure. Market Briefs covers that financing free every weekday.
Companies building the infrastructure behind AI are increasingly tapping debt, betting on demand. Morgan Stanley estimates that outlays on data centers tied to AI may climb to $2.9 trillion from 2025 to 2028, with about half needing external funding - a dynamic that favors bond sales. Firmus's scrapped offering, which would have been among Australia's biggest IPOs, signals that global investors have begun pushing back against valuations they view as overheated.
If DayOne issues bonds, it would be among the first Asia Pacific data center firms to access that market, potentially paving the way for peers to tap deeper capital pools beyond bank loans. The company, once an international affiliate of GDS Holdings Ltd. and, prior to last year's rebrand, known as GDS International, has drawn global backers such as SoftBank Vision Fund, Coatue Management and Ken Griffin, and it closed a $4.5 billion Series C in June. Its website lists operations or projects across Singapore, Malaysia, Japan, Hong Kong, Thailand and Finland. Meanwhile, regional fundraising is accelerating: last month, Masayoshi Son's SoftBank Group Corp. raised the equivalent of $11.1 billion, ranking among the largest corporate junk-bond offerings ever.
This is the plumbing behind the AI boom: data centers and a stack of loans, bonds and private capital to build them. DayOne's mix of bank debt, a possible bond and an IPO filing shows how these projects are getting financed from multiple angles. For everyday investors, the takeaway is that the cash flowing into AI infrastructure is massive, but enthusiasm cools quickly when prices feel stretched, as Firmus just learned. Watching whether DayOne's bond lands and how its buildouts progress across those markets offers a real-time read on the pace and cost of AI's physical expansion.
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