Switch is raising close to $2 billion at a valuation nearing $50 billion with debt, betting private markets still trust data centers even as public AI stocks get hammered.
Switch Inc, the Las Vegas based data center operator majority owned by DigitalBridge, is kicking off a private funding round targeting roughly $2 billion, according to a Bloomberg report published July 2. Andreessen Horowitz is leading the raise with a check of around $400 million, while Goldman Sachs and JPMorgan are working the financing on Switch's behalf. The deal would value Switch's equity at about $19 billion before the new money comes in, and near $50 billion once debt is included.
The timing is not subtle. Bloomberg reported the raise is meant as a precursor to a possible initial public offering as soon as 2027. Switch has been here before. The company priced its first IPO at $17 a share back in 2017, then went private again in 2022 when DigitalBridge and a group of investors bought it for $11 billion. This new round effectively resets the clock, tripling that 2022 price tag in under four years on the strength of AI demand alone.
What makes the raise notable is not the size, it's the contrast with what's happening one floor up in the public markets. Oracle just posted its worst weekly stock slump since the dot-com crash of 2001, sliding 19% in the week ending June 27 as investors digested a free cash flow deficit that ballooned to $23.7 billion in fiscal 2026, up from just $394 million the year before. Oracle spent $55.66 billion on capital expenditures last fiscal year, blowing past its own $50 billion target, and now carries $122.3 billion in long term debt. It plans to raise another $40 billion in fiscal 2027 through a mix of debt and equity, including a $20 billion share offering.
Oracle isn't alone. The Magnificent Seven have shed roughly $2.3 trillion in combined value this past month, according to CNBC, as investors grow impatient waiting for AI spending to show up in profits. Samsung Electronics and SK Hynix both tumbled more than 7% at the open on July 2 as the selloff spread from Wall Street to Asian chipmakers. Profit growth across the Magnificent Seven has slowed to its weakest pace since 2022. The four biggest hyperscalers, Microsoft, Amazon, Alphabet and Meta, are still on pace to spend more than $700 billion on AI infrastructure this year, and public investors are no longer willing to fund that gap without proof it pays off.
Private markets are telling a different story. A day before the Switch news broke, Abu Dhabi's MGX closed its first fund at $49 billion, blowing past its original $45 billion target, according to CNBC. The fund has already backed 14 companies across the AI stack, from chips to data centers to platforms, and counts stakes in both OpenAI and Anthropic. One of its portfolio bets, Together AI, just raised $800 million at a valuation that more than doubled to $8.3 billion. MGX also helped lead the roughly $40 billion purchase of Aligned Data Centres last October alongside BlackRock's Global Infrastructure Partners, one of the largest private equity transactions ever recorded in digital infrastructure.
That's the pattern. Public equity investors are punishing anyone whose AI spending shows up as a cash flow problem before it shows up as revenue. Private capital, sitting on funds like MGX's $49 billion war chest, is doing the opposite: writing bigger checks into the physical infrastructure layer, the power, the racks, the real estate, where returns are measured in long term leases rather than quarterly earnings calls.
Switch fits that logic well. It doesn't have to answer to a stock price every 90 days, and its business, leasing capacity to hyperscalers and AI labs under multi-year contracts, looks a lot more like a utility than a software company. Frankly, that's exactly why Andreessen Horowitz and the banks arranging this round are comfortable pushing the valuation toward $50 billion while Oracle investors are heading for the exits over comparable spending numbers.
The risk sits in the gap between the two markets. If the public selloff in AI infrastructure names like Oracle and the chipmakers is an early warning about overbuilt capacity or underwhelming returns, Switch's IPO window in 2027 could open into a much colder market than the one funding it today. DigitalBridge and Andreessen Horowitz are betting that data center capacity itself stays scarce even if the applications built on top of it don't all pan out. Whether that bet holds will depend less on Switch's own numbers than on whether Oracle's bad month turns out to be a warning sign or a blip.
Also read: Anthropic's Fable 5 Pricing Mess Is Handing Chinese Rivals an Opening • Base44 built its own AI model because generic chatbots make ugly apps • Nvidia Will Take a Cut of AI Startups' Future Revenue Instead of Cash Upfront
