Shares in South Korean data centre developer Elice fell nearly one-third on the day of their debut, amid broader concerns around the sustainability of the AI spending boom.

The company, which raised 201.1 billion won ($151.6m, £113.4m) provides AI-focused cloud services as well as AI-based education and business software.

Heavy spending

It shares were priced initially at 61,500 won, but closed Tuesday 32 percent lower.

It said it would spend most of the IPO proceeds on deploying portable modular data centres and other infrastructure.

AI infrastructure-related companies have faced souring investor sentiment in recent weeks amid higher borrowing costs that have raised questions around the massive funding that they require.

Analysts noted that Elice’s IPO was priced on 6 October, prior to a recent sell-off in AI stocks.

Three other data centre firms, Australia’s Nvidia-backed Firmus and Blackstone-backed AirTrunk, and Japan’s SB Energy, have all cancelled or postponed IPO plans this month.