Everyone knows artificial intelligence needs huge amounts of computing power. What gets less attention is where that computing actually lives - inside data centers. And right now, those buildings are getting harder to find.
One person familiar with the discussions said, "An agreement might be finalized by the fall."
Netrality is not a household name, but it controls a portfolio of 18 sites across North America. Combined, those facilities offer more than 100 megawatts of capacity.
Macquarie Asset Management, a unit of the Australian bank, bought a majority stake in Netrality back in 2019 from Abrams Capital Management. Now it looks ready to cash out at a time when data-center values are climbing fast.
The reason TPG is interested comes down to one word: demand.
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The surge in AI adoption is straining current computing infrastructure, and securing adequate electricity for new data centers now poses a significant challenge.
That makes existing facilities - like the ones Netrality already owns - extremely valuable.
The data center industry is experiencing a wave of consolidation as investors race to secure assets that are already built and operational. Netrality's properties, located in key interconnection hubs, offer immediate capacity in markets where new construction is hindered by power constraints and long permitting timelines. This strategic acquisition would place TPG in a strong position to serve the growing needs of cloud providers and AI companies.
Netrality's portfolio includes sites in major interconnection hubs such as St. Louis, Kansas City, and Philadelphia, where multiple fiber networks converge. These locations provide immediate capacity in markets where greenfield development is severely limited by power shortages and lengthy permitting processes, making them highly attractive for AI workloads that demand low latency and high bandwidth.
This is not TPG's first play in the space.
If the Netrality deal goes through, TPG would control a network of properties that could serve as the backbone for those AI operations.
That said, a deal is not guaranteed. The negotiations are still in progress, and talks can fall apart. But the fact that TPG has gone exclusive means both sides are serious.
The broader context explains the feverish pace of dealmaking. Data center vacancy rates have shrunk to historic lows in major U.S. markets, while lead times for new construction stretch to three years or more due to transformer shortages, utility interconnection delays, and local zoning battles. This supply-demand imbalance has pushed valuations for operational facilities to multiples rarely seen in commercial real estate. Macquarie's investment in Netrality six years ago is now paying off handsomely as the Australian bank eyes an exit during this peak cycle.
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