With the support of nearly $1 billion in new investment from battery giant CATL, China's oldest independent data center operator, Century Internet, is gradually regaining its footing in the AI era.
<h4>Key Points:</h4>
<ul>
<li>Once lagging behind its peers, Century Internet (VNET) has further propelled its transformation into a large wholesale data center operator focused on AI through a significant partnership with CATL.</li>
<li>Even with CATL's investment of nearly $1 billion, Century Internet's founder, Chen Sheng, still firmly controls the company; this investment also indicates that CATL is extending its reach from battery business into the AI energy infrastructure sector.</li>
</ul>
Hu Minghe
When Chen Sheng, known as Josh, founded Century Internet Group (VNET.US) in 1996, China had not yet seen its first independent private data center. Thirty years later, after experiencing numerous ups and downs and unstable development, Century Internet believes it has finally found the formula for success, which is to bet on the AI boom, as data center capacity has now become a key strategic asset in the tech competition between China and the U.S.
This new reality was fully reflected last week. A consortium related to the leading power battery company CATL (300750.SZ; 3750.HK) agreed to invest nearly $1 billion to acquire approximately 38% of Century Internet's shares. Following the announcement, Century Internet's stock price surged by about 25%, reflecting strong market confidence in its prospects and indicating that CATL believes the stock was severely undervalued at the time.
<h4>From Pioneer to AI Competitor</h4>
In its early years, Century Internet established its market position by providing hosting services outside the systems of China's three major state-owned telecom operators. At that time, the Chinese data center market was almost monopolized by state-owned telecom companies. Today, Century Internet operates over 50 data centers in more than 30 cities across China, with a wholesale capacity of 889 megawatts (MW) and over 49,000 retail cabinets. Its clients include internet and cloud service giants like ByteDance, Alibaba, and Tencent, whose AI deployments continue to drive demand for data center capacity.
However, before the recent AI boom, Century Internet lagged behind faster-growing and more strategically mature competitors for most of the past decade. Heavy debt, corporate governance concerns, and multiple failed privatizations have continuously undermined investor confidence, leading to its valuation being consistently lower than peers GDS (GDS.US; 9698.HK) and Chindata.
Century Internet's turnaround is built on its shift towards large wholesale data centers designed specifically for AI computing workloads. By 2025, the company is set to add a record 404 MW of new capacity, bringing its operational wholesale capacity to 889 MW, with an additional 452 MW under construction. The total new wholesale orders amount to 135 MW, driving the committed rate of operational capacity to 95%, with an overall utilization rate of 70.1%
As the company expects to add 450 to 500 megawatts of capacity by 2026 and plans to invest 10 to 12 billion yuan (approximately 1.4 to 1.7 billion USD) in capital expenditures this year, Century Internet's large wholesale business centered on AI has quickly become a major growth engine.
<h4>CATL Steps Out of Battery Business</h4>
On the other hand, CATL has suddenly found new AI collaboration possibilities with Century Internet. CATL has established a global leading position through its electric vehicle batteries and energy storage business, but fierce competition is forcing it to seek new directions beyond its core business. This spring, the company invested in the parent company of high-voltage direct current supplier Hangzhou Zhongheng Electric and signed a large sodium-ion battery contract, followed by further investment in Century Internet.
The strategic logic is quite straightforward: combine CATL's energy storage technology with data center power systems to establish a &#34;battery-power-computing&#34; ecosystem. The foundation of this model lies in the fact that data centers are inherently high-energy-consuming industries, and as high-computing AI applications rapidly increase, electricity demand continues to rise. Many data centers are currently powered by solar energy systems, but they also require energy storage devices to ensure stable power supply even when there is no sunlight.
In 2025, CATL is expected to sell a total of 541 gigawatt-hours (GWh) of power batteries and 121 GWh of energy storage batteries. However, the shipment volume of its energy storage system batteries grew only by 29%, far below the market's overall growth rate of 79%, mainly due to competitors like BYD (002594.SZ; 1211.HK) and EVE Energy (300014.SZ) actively expanding. This investment in Century Internet not only provides CATL's energy storage products with stable customers but also offers a real-world testing platform for its new technologies.
<h4>Century Internet Still Surnamed &#34;Chen&#34;</h4>
According to the transaction plan announced last Wednesday, two investment companies associated with CATL will acquire up to 650.4 million shares of Century Internet Class A common stock at a price of $1.4486 per share, equivalent to $8.6914 per American Depositary Share (ADS). If the transaction is fully completed, CATL will hold approximately 38.1% of Century Internet's issued shares.
However, CATL is still far from actually controlling Century Internet, as another agreement signed simultaneously stipulates that CATL must exercise its voting rights according to Chen Sheng's instructions. In addition, the investor rights agreement also imposes certain time limits on share transfers. In simple terms, CATL has obtained an important strategic shareholding position, but Chen Sheng continues to control the company's decision-making power.
Considering Century Internet's long-standing underperformance in the past, such an arrangement may disappoint some investors who expect a comprehensive reform of the company's governance structure. However, market reactions indicate that investors see more than just a typical share sale transaction. With CATL's endorsement, Century Internet's AI transformation strategy appears more credible and is tied to a partner who understands one of the most critical bottlenecks in the AI industry—power
<h4>Financing for AI Expansion</h4>
This strategic investment comes at a time when Century Internet is significantly increasing its investment in capital-intensive data center operations. In recent years, the company has promoted a so-called &#34;conveyor belt&#34; financing model, which involves developing projects first and then selling mature assets to private real estate investment trusts (REITs) to recover funds. In March 2026, the company launched two REIT products in Shanghai, raising 6.36 billion yuan. This funding will be used to support Century Internet's delivery plans for 2026. The company also stated that without an asset recycling mechanism, it may need to incur additional debt of over 8 billion yuan each year to support its existing project reserves.
Additionally, the company still faces other risks. Century Internet's large wholesale business heavily relies on a few major clients, and if these clients slow down their AI infrastructure investments or shift to building their own data centers, it could put pressure on orders. Furthermore, if the REIT sales progress is delayed, it could also increase pressure on the company's balance sheet.
However, the overall market environment remains favorable. Frost &amp; Sullivan estimates that driven by IT outsourcing, 5G, cloud services, and AI demand, the market for neutral data center services in China will achieve an average annual growth rate of 18.5% between 2025 and 2030.
<h4>Energy AI and Global Competition</h4>
CATL's investment in Century Internet also reflects deeper industrial changes. In the AI race, electricity is becoming as important as the GPU chips that support AI computations. The International Energy Agency (IEA) estimates that by 2030, electricity demand from data centers in the United States will double to 4,260 terawatt-hours (TWh), while China's demand may also double to about 2,770 TWh.
China's advantage lies in its ability to rapidly expand its power infrastructure. Currently, China's power generation exceeds that of the United States by more than two times, and it has a transmission construction speed that is difficult for the West to match. Combining Century Internet's data center operational foundation with CATL's energy storage and power conversion technologies aligns perfectly with China's strategic direction of establishing a nationwide high-capacity data center network to support AI development.
This is particularly important as the U.S. and China are currently in a state of technological confrontation. The Xi-Trump meeting held last week in Beijing, while achieving some limited economic cooperation, did not make breakthroughs on the issue of advanced AI chip exports. In this context, the collaboration between Century Internet and CATL appears to be more than just a corporate transaction; it reflects China's attempt to establish its own infrastructure advantages while catching up with GPU chip technology in the global AI competition

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CATL invests nearly 1 billion USD to support Century Internet's transformation into an AI data center operator, helping it to rise again in the AI era. Century Internet's founder Chen Sheng still controls the company, and the stock price rose by about 25% after the investment. The company operates over 50 data centers in China, with clients including ByteDance, Alibaba, and Tencent, and the demand for AI is driving its market prospects

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CATL invests 1 billion USD to enter AI infrastructure, Century Internet welcomes a turnaround opportunity