Apollo Acquires Majority Stake in Stream Data Centers to Capitalize on AI-Driven Infrastructure Growth

Apollo has agreed to buy a majority interest in Stream Data Centers (SDC) as part of a strategic bet on the booming demand for digital infrastructure driven by artificial intelligence and cloud computing. Data centers, critical hubs housing computing hardware, are expected to see global spending of up to $6.7 trillion by 2030, according to McKinsey.

Stream Data Centers specializes in building, leasing, and managing large-scale data center campuses. It has completed over 20 projects and has an extensive pipeline with multi-gigawatt capacity. Apollo aims to scale SDC to become a key partner for major hyperscalers like Amazon, Microsoft, and Google, who increasingly rely on third-party developers for land acquisition, regulatory approvals, and power sourcing for their data centers.

Apollo partner Trevor Mills emphasized the ongoing and diverse demand from hyperscalers requiring collaboration with external developers. This investment aligns with rising capital expenditures by tech giants — Meta recently raised its annual spending forecast by $2 billion to as much as $72 billion, Microsoft plans over $30 billion in its fiscal first quarter, and Alphabet increased its 2024 capex target to $85 billion, with further rises expected to meet AI demands.

While financial terms were not disclosed, Apollo’s president Jim Zelter highlighted that data centers will need $1.5 trillion in external financing by 2030, with private credit accounting for $800 billion — a space where Apollo leads. The International Energy Agency forecasts electricity demand for data centers will more than double by then, surpassing Japan’s current total consumption.

Other major asset managers like Blackstone, KKR, and BlackRock have also committed billions to data center investments, underscoring the sector’s growing importance. Stream Data Centers’ management will retain a minority stake and continue running operations post-deal.