(Bloomberg) -- Billionaire Xavier Niel’s telecommunications group Iliad SA is set to sell half of its data-center business to French infrastructure fund InfraVia Capital Partners, capitalizing on growing demand for computing power amid an artificial intelligence boom.
InfraVia is in exclusive talks to take a 50% stake in OpCore, for a total enterprise value of €860 million ($904 million), Iliad said in a statement on Tuesday. The two companies plan to invest €2.5 billion over the next decade to expand the business in Europe, including through raising debt and mergers and acquisitions, Iliad Chief Executive Officer Thomas Reynaud said in an interview.
The partnership shows a continuing appetite for data-centers deals, as US tech companies and specialized operators continue to invest and build new sites to satisfy soaring demand for cloud computing and AI infrastructure.
“Our goal is to create the biggest data-centers platform in Europe, with European capital only,” Reynaud said. Being located in the European Union is key to some customers who don’t want their data exposed to other jurisdictions, he added.
OpCore operates 15 data centers across Paris, Lyon, Marseille and in Poland, and has about 150 customers including major US cloud computing providers and large French corporations. Reynaud said the company has a goal of quadrupling OpCore’s 131-megawatt capacity over the next 10 years. The company generates 35 million in annual earnings before interest, taxes, depreciation and amortization, Iliad said.
Scaleway, Iliad’s cloud unit, will remain one of OpCore’s top customers, Iliad said in the statement.
InfraVia and Iliad earlier teamed up in 2020 on fiber optic deployment. Reynaud said in the interview that it makes sense for Iliad to expand its data-center business in the countries where it also operates as a phone carrier, namely in France, Poland and Italy.
Last year, Iliad invested €100 million, matched by billionaire Rodolphe Saadé, in a nonprofit artificial intelligence lab in Paris called Kyutai. Former Google Chief Executive Officer Eric Schmidt also invested an undisclosed amount.
Niel has also been investing in AI outside of Iliad. He was an early investor in Paris-based Mistral AI, a French rival to OpenAI, as well as other buzzy startups like H and Poolside. He has said he hopes more of the AI programs used in the future will be designed in Europe.
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