X2M launches dedicated data centre subsidiary to chase AI infrastructure boom
X2M Connect (ASX: X2M) has established X2MDC Pty Ltd, a wholly owned subsidiary, to pursue a pipeline of possible AI-enabled data centre projects expected to be developed across Australia.
The company is targeting data centres in sizes up to 100MW, applying more than a decade of experience connecting and optimising water, gas and energy devices to the infrastructure challenge facing every AI facility being planned today.
The move represents a new strategic growth vehicle rather than a confirmed contract. No projects, revenue figures, or contract values have been disclosed at this stage.
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Why the data centre opportunity matters for X2M investors
The launch positions X2M within one of the fastest-growing infrastructure themes globally, with the subsidiary structured to pursue recurring revenue across the life of each facility.
Third-party forecasts point to substantial market tailwinds. According to McKinsey & Company, Australian data centre demand is forecast to grow from 1.5GW in 2025 to as much as 5.0GW by 2030, requiring up to $190b of digital infrastructure investment.
On a global basis, McKinsey Global Institute forecasts demand rising from approximately 82GW in 2025 to around 220GW by 2030. These figures describe the broader market opportunity rather than any secured position held by X2M.
A capital raise for data centre execution followed in July 2026, with X2M securing approximately $2 million through a placement directed at sensor integration, energy management systems and battery storage infrastructure, alongside roughly $3 million in already-contracted FY27 revenue entering the new financial year.
X2M’s AI integration and management layer is designed to extract more usable compute from every megawatt built, directly addressing the compute shortage underpinning that demand.
CEO Commentary
“X2MDC gives us a dedicated vehicle to execute on our pipeline of possible data centre opportunities. X2M has spent more than a decade connecting and optimising devices across water, gas and energy, and that is exactly the challenge for every AI facility being planned or built today,” said Mohan Jesudason, Chief Executive Officer.
Explained: How X2M plans to make money from data centres
X2MDC intends to take two offerings to market: Platform Services and Managed Delivery.
Platform Services is the AI integration and management layer for a data centre. It brings cooling, power, water and environmental systems into a single real-time layer, allowing operators to increase the compute a facility supports while reducing running costs. Pricing is expected to be on a per megawatt basis, generating recurring revenue across the life of each facility.
Managed Delivery is an end-to-end service covering the contracting and delivery of a complete data centre. This spans design, establishment and supplier selection through energy, cooling, compute and networking to long-term operations. X2M aims to earn a margin on services delivered and, where negotiated, ongoing recurring revenue.
Notably, Platform Services is planned to be a mandatory component of every Managed Delivery contract, reinforcing the potential stickiness of recurring revenue across the portfolio.
The revenue streams X2M expects to earn
The following revenue types are expected from future contracts, subject to agreed scope and negotiation:
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Cost recovery on equipment and services supplied for the data centre and wider precinct works
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Commissions and service fees payable on goods and services supplied through partners
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Success-linked remuneration tied to defined milestones, such as an executed contract or written commitment
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Platform and SaaS revenue for environmental and facility management across the data centre
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Long-term operations revenue across the asset life cycle, covering supply, installation and operation
X2M has also flagged additional revenue sources as the business develops, including precinct energy infrastructure, networking infrastructure, behind-the-meter energy management, and private 5G networking.
What a customer contract could include
Contracts are expected to vary depending on customer requirements and agreed scope. The table below summarises the potential service components disclosed by the company.
| Service Component | What It Delivers |
|---|---|
| Establishment & coordination | Business modelling, structuring, partnership formation and project management |
| Partner selection & contracting | Engaging reputable partners to design, engineer, install and operate equipment |
| Tenant acquisition | Identifying and engaging prospective data centre service tenants |
| AI integration & management | Single real-time layer to increase compute per megawatt |
| Facility management | Temperature, humidity, sensor monitoring and precinct system interfaces |
| Data centre management | Installation and operation of electricity, heat and water management systems that interface with the wider precinct |
| Networking | Network infrastructure for data centre operations |
| Energy infrastructure delivery | Battery storage, solar PV and other precinct energy assets |
Built for GPU-accelerated workloads
X2MDC will target high-density GPU-accelerated facilities, where power and cooling loads are highest and continuous optimisation is intended to deliver the greatest savings.
The company frames this alignment with the concept of sovereign compute capability for Australia, a demand driver reflected in the forecast growth of domestic data centre infrastructure. By focusing on the most power-intensive workloads, X2M is positioning its optimisation layer where the potential value of efficiency gains is greatest.
What comes next for X2MDC
X2MDC is now the dedicated vehicle established to execute the pipeline of possible projects. No timelines, contract wins, or revenue figures have been disclosed.
Management has expressed an ambition to deliver services in association with what the CEO described as “some of the top providers in the world,” though no specific partners have been named. The target market remains data centres up to 100MW across Australia.
The Resi Ventures data centre partnership, announced in June 2026, marked the first commercial agreement to flow from the X2MDC strategy, with a five-year deal to deploy X2M’s AI-powered platform across a planned network of regional Australian facilities anchored by a site near Ballarat targeting up to 100MW.
The initiative extends X2M’s existing base. The company supports more than 90 customers across five key geographies and has connected over 500,000 devices to date, leveraging strong government and enterprise relationships throughout Japan, South Korea, Taiwan and the Middle East, positioning the data centre expansion as an extension of proven capability in connecting and optimising resource devices at scale.
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