Megaport (ASX:MP1) is moving deeper into the AI infrastructure race with major contract wins and an A$827.3 million capital raise. The company’s plan to build a global inference cloud gives it exposure to the data-centre boom, but investors still need to consider dilution, competition and execution risk.
Artificial intelligence needs somewhere to live. Every chatbot and AI tool runs on a vast network of computers housed in data centres, and demand for that capacity is growing faster than the world can build it. That has turned the companies supplying the "plumbing" of AI into one of the market's most-watched themes. This week, an Australian name joined the conversation in a big way.
Running and training AI models takes enormous computing power. The chips that do this work are scarce, and the data centres that hold them are expensive to build. So money is flowing not just to the famous AI software names, but to the businesses that provide the underlying hardware, connections and capacity. These are often called the "picks-and-shovels" of the AI gold rush.
This looks like a structural shift rather than a short-term spike. Cloud providers and large companies are racing to lock in capacity for years ahead. A growing focus is "inference", the everyday running of trained AI models to answer questions, which is becoming just as important as the initial training.
For Australian investors, this matters because a handful of ASX AI stocks sit close to this build-out, especially in the connectivity and data-centre layer.
Megaport (ASX: MP1) provides on-demand connections between businesses and cloud providers across Australia, Asia, the Americas and Europe. On 3 June 2026, it announced four new AI infrastructure contracts worth A$458.9 million and a plan to build a global "inference cloud" spanning around 1,100 data centres.
To fund this, Megaport is raising A$827.3 million (about US$594 million) through a share offer priced at A$14.30, a 13.9% discount to its A$16.61 closing price on Monday. The company also tightened its FY2026 revenue guidance to A$307 to A$315 million and reported network annual recurring revenue up 25% year-on-year to A$277.7 million in April.
The opportunity comes with real trade-offs. In its most recent half-year, to 31 December 2025, Megaport reported about A$135 million in revenue and positive EBITDA of around A$35 million, but a statutory net loss of roughly A$19 million, driven mainly by one-off costs from two acquisitions. Raising money by issuing new shares at a discount also dilutes existing shareholders, meaning each share represents a slightly smaller slice of the company.
Competition is fierce, too. Large cloud "hyperscalers" and bigger connectivity players could squeeze smaller operators. Some cautious analysts argue the shares could be worth meaningfully less than today's price if the global expansion fails to earn strong returns.
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