Axiom Raises $2B for AI Power Infrastructure Spin-Off

In a significant move signaling robust investor confidence in the burgeoning AI infrastructure sector, Axiom Solutions International, formerly Flex’s Cloud and Power Infrastructure segment, has secured a substantial $2.0 billion Series A Convertible Preferred Stock investment. This capital infusion, led by General Catalyst with participation from Koch Equity Development and other co-investors, positions Axiom for its upcoming separation as an independent, publicly traded entity focused on critical AI power and thermal management solutions. The transaction values Axiom at an initial enterprise valuation of $37.5 billion.

The strategic investment underscores the immense demand for specialized infrastructure capable of supporting the escalating power and cooling requirements of artificial intelligence workloads. Axiom's integrated offering, which encompasses advanced power supplies, cutting-edge liquid cooling technologies acquired through Flex’s JetCool purchase, and comprehensive rack-level integration, directly addresses these industry bottlenecks. This funding will be instrumental in facilitating Axiom's planned acquisition of EPC Power, a key player in power conversion equipment, for approximately $4.4 billion, as well as managing associated bridge financing and general corporate needs.

Under the leadership of Revathi Advaithi, who is slated to helm Axiom post-separation and previously held executive roles at power management firm Eaton, the company is poised to challenge established giants in the data center infrastructure market. Axiom's unique advantage lies in its ability to leverage Flex's extensive electronics manufacturing services (EMS) supply chain and manufacturing scale from inception, rather than building these capabilities from the ground up. This inherent operational strength is expected to accelerate its market penetration and competitive positioning against rivals such as Vertiv, Schneider Electric, and Eaton.

The investment terms include a 10% annual cash dividend on the preferred stock prior to separation, transitioning to a 6% cash or 7% in-kind dividend thereafter, with further adjustments. This structure provides immediate financial benefits while aligning investor interests with Axiom's long-term growth trajectory. General Catalyst, known for its deep expertise in applied AI and its track record of backing category-defining companies, will gain a board seat, reflecting its significant commitment and strategic involvement.

The acquisition of EPC Power, a provider of rectifiers and DC-DC conversion systems crucial for 800-volt DC architectures in AI data centers, further solidifies Axiom's end-to-end capabilities. EPC Power's impressive deployment history, exceeding 15 gigawatts across 62 countries, adds substantial technical depth and market reach to Axiom's portfolio. Flex has secured separate term-loan financing to cover the remaining portion of the EPC Power acquisition cost, ensuring a smooth transition for Axiom.

This landmark deal represents a new paradigm in private equity investment within the AI infrastructure space, moving beyond traditional startup funding rounds to recapitalize and spin off established business units into independent, publicly traded entities. As the demand for AI-driven computing power intensifies, Axiom's focus on foundational infrastructure—power delivery, thermal management, and compute integration—positions it as a pivotal player in enabling the next wave of technological advancement.