Private Capital Rushes to Fund AI Buildout in Emerging Markets

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Or sign-in if you have an account.8isjd2wlb1[7k}9dkqbsxj6q_media_dl_1.png GPCA(Bloomberg) — Private investors are pouring growing sums into artificial intelligence projects across the developing world, pushing deal volumes to record highs in the first half of 2026. 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The inflows are the highest since records began in 2008. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againJeff Schlapinski, the GPCA’s managing director of research, said the surge reflects private investors’ recognition that “there is a durable long-run opportunity in markets outside the US.”In such countries, “persistent gaps in digital and energy infrastructure will serve pent-up demand from businesses and consumers for basic services,” he added.Prominent investments in the first six months of the year include Indian data center firm Nxtra Data Ltd. raising $1 billion from investors including the Carlyle Group, and Yotta Data Services announcing a $2 billion investment in Nvidia chips for an AI computing hub in India. Moonshot AI, the company behind the Kimi chatbot, secured more than $700 million in a financing round at the start of the year, part of a wave of Chinese firms pulling in private capital.Those deals may have set the stage for an even higher tally in the second half of 2026. In July, Apollo Global Management Inc. committed as much as $20 billion to infrastructure projects in Mexico, including data center financing. Kuaishou Technology’s Kling AI secured commitments for $2.8 billion from investors including Alibaba Group Holding Ltd. and Abu Dhabi’s BlueFive Capital.The investments highlight how the AI boom is spreading beyond Asia’s chip manufacturing hubs into emerging nations that are either rich in critical metals or have manufacturing capacity and tech startups. The World Bank this week urged poorer nations to adopt AI tools, tailoring them to their needs as a way to boost growth.Many developing countries’ AI ambitions face obstacles from the lack of internet access, power or skills. Still, Pranav Khamar, portfolio manager at Gemcorp Capital Management Ltd, said opportunities are emerging in markets overlooked by the first wave of AI infrastructure investment.“While Western Europe has faced constraints around power and grid capacity, select markets in central Europe and Africa can offer competitively priced energy and skilled workforces,” he said, adding Gemcorp is closely monitoring prospective assets across the developing world. “Although regional demand has so far limited hyperscaler interest, improving connectivity could shift that dynamic over time,” Khamar said.In examples of AI investment in Africa, Ninety One SA has invested in $100 million into Liquid Telecom Group, which runs data centers in South Africa and Kenya, and it’s committed another $30 million to construct a new facility in South Africa, according to Nazmeera Moola, the firm’s chief commercial officer. In addition, it’s put $15 million into a pan-Latin American platform. “AI and digital related investments we have come across in EMs are well suited to private credit deals because they are actually a form of infrastructure finance,” Moola said, noting the projects have reliable revenue streams due to offtake agreements with US hyperscalers or local firms. “There is nothing that we’ve backed that has been what I would call speculative,” she added.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.