Global buyout firms are finalizing their exit from China's data center sector, with Princeton Digital Group (PDG) set to sell its Chinese assets in a deal valued at up to $1 billion. This move marks the end of a significant investment phase that began in 2017, involving firms like Warburg Pincus, Bain, and Carlyle. PDG, backed by Warburg Pincus, has been a key player in China's digital infrastructure, operating data centers across six cities. The retreat is driven by China's tightened regulatory environment concerning data infrastructure, which is increasingly viewed as a national security issue. This has made foreign ownership of data centers uncomfortable for both China and international investors. Additionally, the broader cooling of US-China investment relations has contributed to this shift. As foreign private equity firms withdraw, domestic and regional players are poised to capture market share, with increased interest in digital infrastructure investments in Southeast Asia, India, and Japan.