☕️ AI jackpot

Good morning.

Fuelled by Steve Schwarzman’s obsession with the “unprecedented” investment opportunities in data centres driving the AI boom, Blackstone is set to acquire AirTrunk for over $20 billion in what’s poised to be Australia’s deal of the year.

With $2 trillion in global capex projected for data centre construction, Schwarzman compares the AI surge to the creation of the electric grid post-Edison’s light bulb—a critical infrastructure leap for a new era.

Schwarzman has said the firm is getting returns above 20% on long term contracts investing in data centres. It’s no wonder then, that backed by about US$1.1 trillion in AUM, Blackstone fought hard for AirTrunk’s 11 Asia-Pacific sites —and its expansion plans in Sydney, Hong Kong, and Osaka. Its consortium, reportedly including the Canada Pension Plan Investment Board, outbid a rival group formed by IFM Investors, Silver Lake, DigitalBridge, and Global Infrastructure Partners.

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Market movers

Mineral Resources and Liontown Resources were the worst performers on the ASX on Tuesday, each falling by 8.5 per cent, as a report by Citi highlighted every lithium mine is losing money at today’s prices except for WA’s Greenbushes.

The quick sync

• PsiQuantum co-founder Pete Shadbolt defended the government's controversial $940m investment into his startup but said it won't cover the cost of its planned Brisbane computer. (Capital Brief)

• Airtasker CEO Tim Fung is betting future growth on a series of strategic marketing deals with US and local media companies that have put shareholders at risk of dilution. (Capital Brief)

• Morgan Stanley stepped up efforts to regain its stock trading crown, after ceding it to longtime rival Goldman Sachs in the wake of the 2021 Archegos Capital Management implosion (FT)

• Myer’s new chief Olivia Wirth will shut most Sass & Bide boutiques, bringing the fashion label exclusively into its department stores ahead of a proposed merger with apparel brands owned by Solomon Lew’s Premier Investments. (AFR)

• Every Australian lithium mine is losing money except for WA’s low-cost Greenbushes, which could withstand a deeper commodity price rout, Citi says. (AFR)

Trading floor

M&A

• Volkswagen may close two German factories, breaking a pledge to avoid job cuts before 2029, as part of cost-cutting measures. (Capital Brief)

• Aussie Broadband sells its 12% stake in Superloop for $99.8m after a Federal Court order to reduce its stake. (AFR)

• Legrand is doubling its Australian footprint with the acquisition of Australian Plastic Profiles. (The Australian)

• EML Payments sold its unprofitable European Sentenial business to GoCardless, streamlining its operations after deeming the business "non-core." (Capital Brief)

• Blackstone wins the AirTrunk auction with a $23.5bn deal, outbidding a rival consortium after nearly a year of negotiations. (AFR)

• Olam Agri extends its takeover bid for Namoi Cotton, awaiting a competition regulator's decision, while rival Louis Dreyfus Company remains in contention. (Capital Brief)

• Pemba Capital acquires a majority stake in water engineering firm Sequana, marking its fourth investment this year from its $625m buyout fund. (AFR)

Capital Markets

• Comstock Fuels is raising $3.7bn to build three biofuel refineries in Australia, with strong investor interest. (AFR)

• The Australian Business Growth Fund invested in Modra Technology, a Victorian carpet manufacturing device company, bringing its total investments to over $180m. (The Australian)

• Barrenjoey facilitated a $60m trade of Megaport shares at a 4.5% discount after market close. (AFR)

• The $15bn Papua LNG project could see more delays as TotalEnergies may exit, with investment decisions already pushed to 2025 due to cost concerns. (The Australian)

VC

• None

People moves

• Scyne Advisory appoints Google executive John Ball as its first independent CEO, meeting a commitment to the Department of Finance. (Capital Brief)

The watercooler