Speaking Friday at the Milken Asia Summit in Singapore, Lincoln Pan of Jardine Matheson - one of Hong Kong's largest conglomerates - didn't mince words: "The risk we think the most about at this point is actually political risk." He tied that to the US-China tech rivalry and to how many investors have made "a highly concentrated bet on the stability of US data policy" through wagers on data centers and US-built AI large language models. Looking out a decade, he added, "Whether US-domiciled companies will be allowed to operate globally with the same degree of stability and certainty over the next decade is a highly, highly uncertain risk that no one can underwrite."
Private equity firms like Blackstone and KKR have funneled billions into Asian data-center platforms, betting that AI and cloud demand will keep surging. Pan noted the region's digital infrastructure is unlikely to keep up with that growth pace, and that many facilities depend on US hyperscalers whose operations are shaped in large part by US government policy. The political backdrop is getting noisier: In a race with China, President Donald Trump has championed AI investment, some AI companies want development to slow, and public pushback to data centers is starting to surface.
A June McKinsey report found China is Asia's biggest data-center market, and, beyond the mainland, roughly 70% of hyperscaler demand comes from Western cloud providers, with Chinese players at about 30%. Jardine Matheson also holds property stakes throughout Asia via its Hongkong Land unit.
Political risk is becoming a line item in corporate planning everywhere. Market Briefs covers that shift free every morning.
The shakiness is already showing up in deals. Firmus Grid walked away from what would have ranked among Australia's biggest-ever IPOs after the Nvidia-backed data-center operator failed to win over global investors increasingly wary of stretched AI valuations. A big chunk of Firmus's valuation hinged on building a pipeline of Asian data centers for customers such as Meta Platforms and OpenAI.
The uncertainty spills beyond servers, too. TPG Inc. executive chairman Jim Coulter urged caution on declaring any victors this early, adding that, in AI, the most telling three words are "I don't know." He compared traditional investing to 10-pin bowling and AI investing to pinball: "We have a number of themes that are very long-term themes that we're still bowling," he said. "But over the other side of the bowling alley, we're playing pinball in AI because you have to shorten your cycle."
If Asia's AI and data-center buildout leans on a narrow set of US players and the twists of US policy, expect a bumpier ride than the straight-up growth narrative. Layer on lofty valuations, early community pushback on data centers, and seasoned investors preaching humility, and the takeaway is simple: the trend is real, but outcomes will hinge on execution, timing, and which partners you bet on.
When conglomerate chiefs warn publicly, they are already repositioning. Get the free Market Briefs daily newsletter and follow it.
