This article first appeared on GuruFocus .
KKR & Co. (KKR) just struck a definitive deal to invest in Compass Datacenters' operating portfolio and future assets, becoming the latest heavyweight to position itself for the expanding AI infrastructure wave. While exact financial terms were not disclosed, a person familiar with the matter said the transaction is expected to raise several billion dollars. Compass had been weighing a stake sale in some of its more mature assets to unlock capital for new builds, and this investment could accelerate that push at a time when data center valuations continue trending higher with the rise of AI.
Compass Datacenters now operates facilities across Chicago, Dallas, Phoenix, northern Virginia, Milan and Tel Aviv. Brookfield Asset Management and the Ontario Teachers' Pension Plan acquired Compass from Redbird Capital Partners and Azrieli Group in 2023 in a deal valued at $5.5 billion including debt. Additional capital from KKR could give Compass room to scale its development pipeline, especially as hyperscale demand increases and computing intensity drives more long-term digital infrastructure spending.
The data center sector has become one of the most aggressively funded corners of private markets, with alternative asset managers such as Blackstone and Blue Owl Capital deploying large pools of capital to support Big Tech workloads. Brookfield has been expanding its own AI infrastructure program and is targeting $10 billion of fund commitments in partnership with Nvidia and the Kuwait Investment Authority. As of late September, Brookfield told investors that Compass has generated a gross return of 1.4 times invested capital, a performance that may suggest meaningful upside if AI computing demand continues to evolve and requires deeper, more geographically distributed infrastructure.
