GDS raises $300M in strategic placement with Huatai Capital
Convertible preferred shares priced at 17.5% premium will fund data center capacity expansion
GDS Holdings, China’s largest carrier-neutral data center operator, has secured $300 million through a private placement of Series B convertible preferred shares with Huatai Capital Investment Limited, pricing the securities at a significant premium to underscore institutional confidence in the company’s expansion strategy.
The conversion price of approximately $54.43 per American Depositary Share represents a 17.5% premium to GDS’s closing price on January 30, 2026, and about 30.9% above the volume-weighted average price for the 30 trading days before the signing date, according to the company’s announcement. The company plans to use the proceeds to expand data center capacity and for general corporate purposes.
GDS is pursuing an aggressive build-out across China and select international markets, with plans to deliver 900 megawatts in China and an additional 700 MW internationally, driven by strong demand for high-performance computing infrastructure tied to artificial intelligence. Utilization rates are expected to reach 78% this year and 79% next year, indicating robust demand for data center services.
The placement also comes as Beijing rolls out policy shifts affecting the sector. China has launched a pilot program that removes the longstanding 50% foreign ownership cap for data centers and certain value-added telecom services in designated areas, including Beijing, Shanghai, Hainan, and Shenzhen. Separately, amended provisions under the Cybersecurity Law taking effect this year expand enforcement and explicitly affirm national support for AI development, emphasizing access to computing infrastructure and training data, per regulatory analyses.
Upon full conversion, the preferred shares would issue approximately 5.5 million ADSs, representing 2.62% of outstanding shares, the company said. The board described the terms as fair and reasonable given the premium, transfer restrictions, and restrictive redemption rights, adding the placement strengthens ties with a leading Chinese financial institution and enhances control by Chinese nationals, supporting continued service to key customers in mainland China.
GDS maintains about a 14% share of China’s data center market and is expanding its footprint internationally to diversify revenue streams, leveraging its scale in China’s eastern corridor. Analysts have maintained a broadly positive outlook on the company’s long-term growth, driven by AI and cloud computing demand, while noting execution risks associated with international expansion and potential pricing pressure.