From Silicon Valley to Berlin: Why Venture Capitalists are Rethinking Data Centre Startups

The tech landscape continues to evolve and nowhere is this more evident than in the area of Artificial Intelligence. As AI demand grows, so does the need for advanced computing infrastructure and data centres are major players in this dance. Venture capitalists, always on the lookout for the next big investment opportunity, are now being wooed by a slew of young data centre companies. In just four months, Jack Wang, a London-based principal at German VC firm Project A, reportedly received half a dozen pitches from startups keen to expand their data centre operations.

Yet the interest in data centres is undeniable. Y Combinator’s list of startup requests for this spring featured data centres, indicating a growing trend. Additionally, investments are already pouring into numerous data centre startups. Notable examples include UK-based AI infrastructure startup Ori, which raised $140m, and Nscale, which is building data centres in various countries including Norway and has raised $155m.

While it’s too early to definitively label data centres as a new asset class for VCs, the landscape is certainly indicating a shift. As with all things tech, only time will tell if this trend solidifies into a mainstream investment path or ends up being a short-lived fascination.