AI SPAC Raises $175 Million, Eyes Targets with Nvidia and Prologis Expertise

Dynamix Corporation III, a Nasdaq-listed special purpose acquisition company (SPAC) strategically focused on the high-growth areas of energy, digital assets, and artificial intelligence, has successfully raised an upsized $175 million in its initial public offering. Sources indicate to CNBC that the offering includes an over-allotment option that, if fully exercised, would bring the total capital raised to $201.25 million, signaling robust investor appetite.

This capital infusion is specifically intended for the acquisition of a private company operating within the rapidly evolving landscape of AI, renewable energy solutions, or cutting-edge digital asset technologies. To effectively identify and assess potential targets, Dynamix III has assembled a team of advisors with deep sector expertise, including executives from commercial real estate powerhouse Prologis, and surprisingly, advisors from AI leader Nvidia. This advisory network’s diverse perspectives – spanning infrastructure, technology, and financial acumen – are crucial for navigating complex deal structures and ensuring that the acquired entity possesses a sustainable competitive advantage.

The SPAC structure provides a streamlined route for private companies to access public markets. By merging with a SPAC, a private company can bypass the traditional IPO process, potentially accelerating its path to liquidity and providing access to growth capital. Dynamix III seeks to capitalize on this dynamic, offering a compelling alternative for innovative businesses seeking a rapid and efficient public listing. SEC filings indicate that Dynamix is strategically positioned to benefit from the converging trends of increased demand for power and data centers resulting from the explosive growth of AI, a thesis that resonates strongly with current market narratives.

The decision to upsize the offering, which was initially marketed at $150 million in August before being increased to $175 million in September, underscores the strong investor interest in the blank-check company’s focused investment strategy. According to sources close to the company, Dynamix III is actively targeting a merger with a company valued at $1 billion or more. Advisors, including Ali Harandi, a data center investing specialist at Prologis, and Andrew Keys, chairman of The Ether Machine , a digital asset firm that Dynamix management previously took public via its second SPAC, are playing key roles in sourcing and evaluating potential deals. As well as Setaj Desai, who oversees global data center engineering and capacity planning at chipmaker Nvidia and Houston energy investor Steve Webster

However, the launch of Dynamix III coincides with a period of cautious optimism in the SPAC market. The boom of 2020 and 2021 witnessed a surge in SPAC activity, with hundreds of blank-check companies raising billions. Data from Bank of America reveals that nearly 800 SPAC transactions occurred during this period. But the subsequent performance of many companies taken public through SPACs has been underwhelming, raising concerns about the quality of acquired companies and inflated valuations. Bank of America’s equity strategist Jill Carey Hall noted in a recent report that a concerningly small percentage of SPAC deals delivered positive share price returns within six and twelve months of the transaction.

Led by CEO Andrejka Bernatova, a seasoned investment banker and private equity veteran, Dynamix III represents the company’s third venture into the SPAC market. The executive team will need to convince investors they have learned from the market downturn, including more stringent valuations, and clear synergies with their ultimate target. Dynamix Corporation II previously raised $166 million in November and announced in July a merger agreement with The Ether Machine . An earlier SPAC named ESGEN, raised $276 million in 2021 and merged with a residential solar firm to form Zeo Energy in March 2024. Cohen & Company Capital Markets acted as the sole investment bank underwriting Dynamix III’s IPO.