X2M Connect launches dedicated data center subsidiary and signs AU$250m AI data center delivery deal

Australian IoT company X2M Connect has formally entered the data center sector with the creation of a wholly owned subsidiary, X2MDC, established to contract and deliver high-density GPU-accelerated data centers. The move positions the company to tap into a rapidly expanding Australian market, with its planned pipeline of data center projects potentially reaching up to 150MW.

X2MDC will oversee the full lifecycle of data center development, including commissioning, engineering, design, delivery, installation, and ongoing operation. The subsidiary will also provide Software as a Service (SaaS) throughout the operational life of the facilities, offering two core service lines: Platform Services, which integrate AI-driven management of cooling, power, water, and environmental systems, and Managed Delivery, an end-to-end service covering everything from contract signing to complete data center delivery, including design, supplier selection, and long-term operations. The company said contract structures will vary depending on customer requirements.

X2M CEO Mohan Jesudason said the subsidiary gives the company a dedicated vehicle to execute on its pipeline of data center opportunities. "X2M has spent more than a decade connecting and optimizing devices across water, gas and energy, and that is exactly the challenge for every AI facility being planned or built today," he said. "We are excited at the prospect of delivering services in association with some of the top providers in the world and offering a comprehensive platform and delivery service to land and data center owners across the country."

The formation of X2MDC follows a McKinsey report published in April 2026, which projects Australian data center demand will surge from 1.5GW in 2025 to as much as 5GW by 2030, requiring up to AU$190bn (~US$135bn) in digital infrastructure investment. The subsidiary's launch comes just two days before X2M signed a binding agreement to deliver an AI-enabled data center, marking the first contract for the new business unit.

The contracted project is a high-density GPU data center with an estimated cost exceeding AU$250m (~US$180m), with full delivery scheduled over a three-to-five-year period. The customer and location have not yet been disclosed, and the agreement does not currently specify the value of the data center power capacity to be deployed. The project will operate under X2MDC's Managed Delivery model, encompassing engineering, design, supply, installation, commissioning, and operation services. Under the agreement, X2M is pre-approved to contract partners across telecommunications, energy systems, compute, AI chip, networking, and research, with the deal conditional only on development approval for the data center.

Jesudason described the agreement as transformational for X2M. "We play a key role in the data center delivery, and that in turn creates a materially large business opportunity for us," he said. "We are excited at the prospect of delivering services from some of the top providers in the world and offering a comprehensive service to this customer and land and data center owners across the country."

The contracted facility is part of X2M's broader pipeline of potential Australian data centers, the majority of which will be located in Queensland. Some sites have already secured development approval. The data centers will range in size from 1MW upwards, with a target total of 150MW across the company's pipeline. X2M, founded in 2019 and headquartered in Mount Waverley, Victoria, describes itself as a smart city technology company serving utility and government customers, claiming to have connected more than 500,000 devices supporting over 90 customers across five geographic regions.

In June this year, X2M announced a partnership with real estate firm Resi Ventures to develop data centers across regional Australia. The collaboration completed settlement on land approximately 10 kilometers (6.2 miles) from Ballarat's central business district in Victoria in July, with plans for a high-density AI-enabled facility with potential capacity ranging from 10-100MW. The new subsidiary and its first contract signal X2M's ambition to become a significant player in Australia's data center delivery market, capitalizing on the country's accelerating demand for AI-ready infrastructure.