off-prem

‘Digital transformation’ is a better bet, apparently, so private equity gets a turn

The advent of generative AI spurred an enormous and controversial datacenter building boom that has seen almost anyone who knows how to run a bit barn try to expand their business ASAP.

Fujitsu, however, wants out.

The Australian outpost of the Japanese giant’s business this week announced the sale of five datacenters down under.

The company said selling the bit barns “enables us to further invest in the technology services where customer demand is growing fastest.”

In Australia, that apparently means “helping organisations modernise critical systems, strengthen cyber resilience, adopt sovereign AI, and access the high-performance and quantum computing capabilities needed for their next phase of transformation.”

Fujitsu said its datacenter business “is a strong platform, and its next phase will benefit from dedicated commercial ownership and investment.”

That new owner, private equity outfit Next Capital, may have its work cut out for it because some of the bit barns it bought appeared to be rather modest. Fujitsu’s manifest of its Australian properties lists one facility capable of hosting 92MW worth of kit, another with 28MW capacity, plus a 10MW, 4.8MW, 3MW, and 2MW.

Keen-eyed readers will have noticed that the paragraph above mentions six datacenters and that earlier in this story we said Fujitsu is selling five. The Register understands Fujitsu has already disposed of the other one to another buyer.

Whatever Next Capital bought, it will surely be aware that a modern rack filled with AI kit can require 500KW or more. Fujitsu Australia’s littlest datacenters therefore won’t help the investment company to catch the AI wave unless it invests in upgrades – a process that might be cheaper than building new AI-ready datacenters from scratch and could also involve fewer regulatory complications than greenfield builds.

Next Capital was quiet about its plans, but shared to a local media report suggesting it’s spent AUD$200 million ($139.97/£104 million) to do the deal. The firm promised continuity for tenants.

Fujitsu Australia’s services business won plenty of blue-chip and government clients, and The Register understands many are long-term residents of the offloaded datacenters. Next Capital can probably therefore bank on solid cashflow for months or years to come.

Fujitsu sold its US datacenter business in 2023 and at the time hinted at divestments elsewhere. The company has also “absorbed” its Japanese public cloud and quit the mainframe business.

The Japanese giant plans to return to the big iron business with machines built on the Monaka CPU which it hopes to deliver next year, and perhaps also get into the quantum computing biz. ®