The founder of Chinese data center firm Vnet (formerly 21Vianet) has withdrawn his offer to acquire all outstanding shares of the company.

Josh Sheng Chen, co-chairperson and CEO at Vnet, made a preliminary non-binding proposal in September 2022 to privatize the company by acquiring all outstanding shares.

Following Chen’s offer withdrawal, the company said it would not be considering any similar transactions involving the privatization of the firm.

“I withdrew my privatization proposal as I believe that maintaining Vnet's listing status is better aligned with the company's long-term interests given current market conditions. I remain confident in Vnet's growth potential and will continue to devote myself to its high-quality, sustainable development.

“Looking ahead, guided by our entrepreneurial mission for the next 25 years to bring green direct-current electricity from AIDC to millions of households, Vnet will continue to leverage its core strengths to capture AI-driven demand, drive industry-wide progress and upgrades in the AGI era, and inject new vitality into China's digital economy,” said Josh Sheng Chen.

Jianbiao Zhu, CEO at Shandong Hi-Speed Holdings and co-chairperson at Vnet, said: “We are optimistic about Vnet's future as a listed company and will continue to strengthen our cooperation for mutual success. Together, we are building an AI-powered, green infrastructure platform that will comprehensively cover high-performance computing scenarios such as large language model training, bolstering Vnet's leading position in China's IDC industry.”

Chen founded Vnet as 21Vianet in the mid-1990s. Vnet has more than 50 data centers in more than 30 cities across China, totaling around 475MW.

In April 2022, Chinese investment firms Hina Group and Industrial Bank Co. both made bids to buy the firm. CDH Investments and PAG were also both said to be interested in the company.

Hong Kong-listed investment holding company Shandong Hi-Speed Holdings Group Limited (SDHG) made a $299m investment into Vnet late last year, taking a 42 percent stake.

Most recently, the firm has been accused of security fraud. The lawsuit said the company and its co-founder Josh Sheng Chen failed to disclose information about financial difficulties it was experiencing, which ultimately led to the company’s shares being devalued.