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Abu Dhabi sovereign wealth fund Mubadala is investing in global hyperscale data center developer Yondr Group, according to Mubadala statement. Mubadala made the investment “alongside Apollo Management via an existing investment from Apollo-managed funds,” suggesting it may have acquired a piece of a stake that the US-based alternative asset manager picked up in June 2023. Mubadala didn’t put a value on the investment in the London-based firm, nor did it say how the transaction was structured.
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Mubadala is backing Yondr as global demand for cloud services surges on the back of advancements in artificial intelligence, 5G technology and the internet of things, according to the sovereign fund. It sees the global market for data centers growing at a compound annual growth rate of 11% through 2032.
Yondr has big green ambitions: Yondr has pledged to reach net zero Scope 1 and Scope 2 emissions by 2030, according to a statement. As part of that commitment, the company aims to lower emissions from all of its data centers by increasing energy efficiency and using renewable energy. Yondr will also incorporate Scope 3 emissions reductions by working with its clients and supply chain partners.
WATCH THIS SPACE #1- Increased demand for AI is raising emissions: Data center electricity consumption is expected to double by 2026, according to data by the International Energy Agency. Google’s emissions surged nearly 50% in five years due to AI energy demand, while US tech company Microsoft also reported a 30% increase in carbon emissions since 2020, driven by its AI investments.
WATCH THIS SPACE #2- And water consumption: Data centers’ rapidly increasing demand for water — used to cool down computing equipment — is predicted to continue as Big Tech invests USD bns into data centers looking to integrate power and water-intensive AI tech. This is predicted to decrease the availability of water, which is already diminishing significantly as a result of climate change-induced droughts.
This isn’t Mubadala’s first sustainability-focused data center investment: Mubadala and US private equity firm KKR jointly acquired last year CoolIT Systems, a provider of liquid cooling for data centers. The Canadian firm develops coolant that is designed to reduce operating costs and carbon emissions of data centers and digital infrastructure. Two of Abu Dhabi sovereign investor Mubadala’s investee companies — Princeton Digital Group and Tata Power Renewables — partnered to supply clean energy for a data center in India in 2023.
Mubadala has been active in the green sector: Mubadala listed USD 4.5 bn and AED 750 mn green bonds on the ADX in January. The fund also partnered with UAE oil giant Adnoc to enhance national talent development focusing on sustainable growth last month. Mubadala — along with PIF, Abu Dhabi Investment Authority, ADQ, and the Qatar Investment Authority — allocated USD 9.7 bn towards sustainable investments in July — 30% more than the USD 7.2 bn spent on conventional energy sources and hydrocarbon agreements.
