DayOne files $5 billion US IPO as AI data center demand accelerates

DayOne, the data center operator formerly known as GDS International, has confidentially filed for a US IPO seeking about $5 billion, targeting a listing as early as the fourth quarter of 2026, people familiar with the matter said.

The company targets a listing valuation of roughly $20 billion, according to earlier reports cited by Chinese media. DayOne completed its Series B equity financing in 2024, which diluted parent GDS Holdings' (09698.HK) stake from 52.7 percent to 35.6 percent, reclassifying the company from a subsidiary into an equity investee.

GDS Holdings shares traded at HK$30.18 on the Hong Kong exchange, down 0.066 percent, with short selling of $20.16 million representing 17.387 percent of turnover as of Aug. 11, 2026. The IPO's price range, share count, and use of proceeds have not yet been disclosed.

The listing would rank among the largest data center IPOs in the US market, riding a wave of AI infrastructure investment that has pushed data center operators to expand capacity at record pace. DayOne's international footprint, built under GDS's global expansion strategy, puts it in direct competition with established players including Equinix and Digital Realty as hyperscale cloud providers commit billions in capital expenditure to AI compute.

The confidential filing follows a broader trend of data center operators seeking public capital to fund AI-driven capacity expansion. DayOne's operations span multiple markets outside mainland China, attracting investor interest as global cloud providers race to secure compute capacity for AI workloads.

GDS Restructuring Unlocks Value

The Series B round that diluted GDS's stake reflected DayOne's transition from a wholly owned subsidiary to a standalone entity with its own investor base. The reclassification means GDS will account for DayOne as an equity investee rather than consolidating its financials, a change that affects how GDS reports its balance sheet and revenue.

For GDS Holdings, the IPO represents a significant milestone in its corporate restructuring. The dilution of its stake from majority ownership to a 35.6 percent equity interest means the parent company will no longer consolidate DayOne's financial results, potentially simplifying its own reporting while unlocking value from its international operations.

The $20 billion valuation target would place DayOne among the largest data center companies by market value globally, competing with the likes of Equinix and Digital Realty. The timing of the IPO, targeted for late 2026, suggests DayOne is betting that AI infrastructure demand will remain strong through the current cycle, with data center vacancy rates in key markets at historic lows and hyperscale cloud providers continuing to commit billions in capital expenditure to AI compute.

The confidential filing process allows DayOne to prepare its financial disclosures without public scrutiny until closer to the listing date. Under US securities rules, companies can confidentially submit draft registration statements to the SEC, which become public only when the offering is formally launched. This approach gives DayOne flexibility to time its listing to market conditions while completing the necessary regulatory review.

This article is for informational purposes only and does not constitute investment advice.