Hillhouse secures $600M loan for DayOne data center expansion
In brief
- Hillhouse secures $600M loan for additional DayOne investment, signaling confidence in AI infrastructure demand.
- DayOne closed $4.5B Series C in June 2026 led by Coatue and Hillhouse, now largest shareholders.
- DayOne operates campuses across Singapore, Malaysia, Japan, Spain with 1.5+ gigawatts capacity bookings.
The DayOne opportunity
DayOne was originally founded in 2022 as GDS International, serving as the overseas arm of GDS Holdings before becoming a fully independent entity on January 1, 2025. The company operates and develops hyperscale data center campuses across Singapore, Malaysia, Japan, and Spain, with over 1.5 gigawatts of capacity bookings since inception.
Hillhouse's latest commitment builds on existing conviction. The firm participated in a $505 million private placement in GDS Holdings back in 2020, and has remained deeply involved as the business evolved. DayOne closed a $4.5 billion Series C equity round on June 5, 2026, led by Coatue and Hillhouse, who are now the company's largest shareholders. The initial tranche of that round exceeded $2 billion and was announced in January 2026.
The bet and the risk
Hillhouse is clearly betting that sustained AI infrastructure demand will justify the aggressive expansion. Yet the thesis carries real downside.
"The risk is that AI infrastructure spending cools before all this capacity gets utilized. Data centers have long construction timelines, and the market is pricing in demand projections that assume continued exponential growth in AI workloads."
Data centers have long construction timelines, and the market is pricing in demand projections that assume continued exponential growth in AI workloads. If that growth stalls or moderates, DayOne and its backers face the prospect of stranded assets and refinancing pressure. The $600 million loan, structured as borrowed capital rather than equity, amplifies that leverage.
