CyrusOne Partner GDS Partners With Chinese State to Build Data Centers in New Markets

GDS Holdings has partnered with three government-controlled Chinese entities to build data centers in underserved markets across China.

The entities are the State Development Investment Corporation, which is China’s largest state-owned investment company, China United Network Communications Corp. (China Unicom), and China Telecommunications Corp. (China Telecom). The latter two are telcos who are also among the 10 largest data center providers in the world.

In a statement, GDS said that development of the digital economy has created unfilled demand for large-scale data center infrastructure and services in markets across China that are outside of the country’s core markets where the company has data centers today. As a priority, the partners have agreed to start with a pilot project in the Tianjin market.

GDS is one of the primary data center providers in China for the world’s largest cloud platforms. That’s why CyrusOne, one of the largest US-based data center providers, recently spent $100 million to acquire an 8 percent stake in the company and signed a cross-selling partnership agreement. The partners agreed to sell each other’s services in their respective markets to hyper-scale customers.

GDS's latest partnership may lead to more location options CyrusOne can offer its clients in China, but its close ties to the government may also make Western companies more cautious about using its services.

Related:DCK Investor Edge: CyrusOne’s Big Play for the Chinese Cloud Business