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Flex plans Axiom spinoff to chase AI data center power demand in 2027
The contract manufacturer is carving out its cloud and power infrastructure unit as a standalone company, and early investors have already priced it at $37.5 billion
Flex wants to split itself in two, and one of the halves is the part everyone currently wants a piece of. The company plans to spin off its AI infrastructure business, called Axiom, as an independent public company in 2027.
What Flex is actually doing
Flex Ltd., which trades on Nasdaq under FLEX, first announced the plan in May 2026. The unit being separated is its Cloud and Power Infrastructure segment, known internally as CPI.
Once independent, the business will be called Axiom Solutions International, Inc. It specializes in power and thermal management for AI data centers.
The separation is targeted for completion in the first quarter of calendar 2027. It is structured as a tax-free pro rata distribution, meaning existing Flex shareholders receive Axiom stock in proportion to what they already own.
Flex shareholders are set to receive approximately 88-94% of Axiom’s shares. Flex itself is expected to keep a 6-12% stake.
Axiom is slated to list on Nasdaq under the ticker AXM. A preliminary Form 10, the registration document required for a spinoff, was filed on September 15, 2026.
The $37.5 billion price tag
The most eye-catching number arrived on October 5, 2026. Flex disclosed an agreement to sell $2 billion of Series A convertible preferred stock in Axiom to investors.
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That deal values Axiom at an initial enterprise value of $37.5 billion. For context, Flex’s own market capitalization stood at approximately $43.9 billion at the time.
The money has a job to do. Proceeds from the preferred investment will help fund Axiom’s acquisition of EPC Power, a deal announced in September 2026 that costs around $4.4 billion.
On the revenue side, Axiom posted net sales of $6.614 billion for the fiscal year ended March 31, 2026. Including EPC Power on a pro forma basis, that figure rises to about $7.031 billion.
Who runs the new company
Revathi Advaithi, currently CEO of Flex, is expected to lead Axiom after the separation. Bill Watkins is set to serve as non-executive chairman.
What this means for shareholders and the AI supply chain
For current Flex holders, the near-term math is straightforward. They will end up owning two stocks instead of one, with the bulk of Axiom’s shares landing in their accounts through the pro rata distribution.
The $37.5 billion preferred-round valuation gives the market an early anchor. Still, a private enterprise value set by a $2 billion convertible preferred deal is not the same as a public market price. Convertible preferred buyers typically negotiate protections that common shareholders do not get, so the eventual trading value of AXM could land somewhere quite different.
Execution risk sits mainly with the EPC Power deal. At around $4.4 billion, it is a large acquisition for a company that has not yet started trading independently.
For the remaining Flex business, its retained 6-12% stake in Axiom keeps some upside on the books, but the core company will be judged on its own trajectory.
Key milestones to watch include updates to the Form 10 filing, the closing of the EPC Power acquisition, and confirmation that the first quarter 2027 timeline holds.