CAF II Invests in Singapore Data Center Platform Racks Central for AI-Ready Regional Hub

Singapore-headquartered data centre platform Racks Central has secured a strategic investment from the US$1 billion China-ASEAN Investment Cooperation Fund II (CAF II), backing its plan to build an AI-ready data centre corridor across Southeast Asia. The investment, advised by Asia-Pacific real asset manager ESR, will support Racks Central's overseas expansion starting with Johor, Malaysia, where it is constructing a campus of four large-scale developments with a combined capacity of up to 510 MW.

Founded in 2014, Racks Central currently operates a 12 MW colocation data centre in Singapore serving enterprise and cloud customers. The company's strategy focuses on delivering large-scale, AI-ready and energy-efficient capacity to hyperscalers, cloud providers, and enterprises — a segment facing explosive demand as AI workloads strain existing infrastructure across the region. Jeffrey Shen, Co-founder and Co-CEO of ESR, said the rapid acceleration of AI adoption is "fundamentally reshaping data centre requirements across Asia-Pacific."

The investment comes at a time when Southeast Asia is experiencing sustained growth in AI adoption and cloud computing, driving the next wave of demand for scalable, high-performance data centre infrastructure. Racks Central's planned Johor campus comprises facilities designed specifically for AI workloads, with advanced cooling solutions and energy-efficient design embedded from the ground up. The company's vision is to create a seamless AI-ready data centre corridor connecting Singapore, Johor, and other key hubs.

The deal also signals something broader: capital flowing from Chinese-linked funds into Singapore-linked AI infrastructure. CAF II is a China-ASEAN focused fund, and its backing of a Singapore-headquartered data centre operator building in Malaysia reflects the region's growing role as a battleground for AI infrastructure investment — between US hyperscalers, Chinese capital, and homegrown Southeast Asian players.

Why it matters for Singapore: Data centres are the physical backbone of AI, and Singapore's land and energy constraints mean it must export some of that demand to neighbours like Johor while keeping the strategic control and corporate headquarters locally. Racks Central's expansion plan — Singapore HQ, Johor data halls, regional AI corridor — mirrors the broader strategy of Singapore positioning itself as the brain while regional hubs provide the brawn. For enterprises relying on AI workloads in Southeast Asia, the question of where their data sits and who controls the infrastructure has just become more complex.