Starboard Value, the activist fund run by Jeff Smith, has taken a sizable stake in graphics-design firm Autodesk and has spoken with the company’s board in recent weeks over a number of serious concerns involving its disclosures around an internal investigation that led to the ouster of its chief financial officer.

Starboard’s stake is valued at roughly $500 million, according to people familiar with the matter. The activist, which has a long track record of investing in the technology sector, is particularly concerned about the timing of Autodesk’s disclosure of an internal investigation which revealed that executives misled investors around the company’s free cash flow metrics and operating margins, said the people, who requested anonymity to discuss confidential information freely.

The results of that probe led to the ouster of Autodesk’s then-CFO, Deborah Clifford, who was moved to a different executive role within Autodesk. The probe found that executives manipulated reporting tied to company’s contract billing structure, as Autodesk shifted back to upfront payments from annualized payments, to improve those metrics.

Autodesk first disclosed in April that it had begun an internal investigation into disclosure issues around those metrics, almost a month after it had first begun the investigation and had informed the Securities and Exchange Commission that it was probing its financial reports. Autodesk shares slid 20% over the next few weeks. The company’s market cap now sits slightly below $50 billion.

The delayed disclosure came a little more than a week after the deadline to nominate directors closed. The tight window and timing of the disclosure has raised significant concerns inside Starboard, the people said, that Autodesk’s board deliberately chose not to inform shareholders ahead of its annual meeting. Such a delay would potentially limit a shareholder’s ability to nominate its own candidates in a contested fight.

Starboard is weighing legal action in Delaware Chancery court to compel the reopening of Autodesk’s nominating window and the delay of Autodesk’s annual meeting, the people said. Autodesk’s shareholder meeting is currently scheduled for July 16.

The activist also believes that the company can drive actual margin improvement and improve investor communications to help bolster Autodesk’s stock, the people said.

Starboard has built stakes in other major technology companies, including Marc Benioff’s Salesforce and Splunk, which was sold to Cisco in 2023 for $28 billion.

News of Starboard’s stake and plans was reported earlier by the Wall Street Journal.

Autodesk has faced activist scrutiny before. In 2016, it settled with two activist investors at Sachem Head Capital Management and Eminence Capital to stave off a proxy contest.

Autodesk disclosed earlier this year that it is facing Justice Department and SEC probes. A representative for the company did not immediately return a request for comment.

Malaysia is emerging as a data center powerhouse in Southeast Asia and the continent more broadly as demand surges for cloud computing and artificial intelligence.

Over the past few years, the country has attracted billions of dollars in data center investments, including from tech giants like Google, Nvidia and Microsoft. 

Much of the investments have been in the small city of Johor Bahru, located on the border with Singapore, according to James Murphy, APAC managing director at data center intelligence company DC Byte.

“It looks like in the space of a couple of years, [Johor Bahru] alone will overtake Singapore to become the largest market in Southeast Asia from a base of essentially zero just two years ago,” he said. 

Johor Bahru was named as the fastest growing market within Southeast Asia in DC Byte’s 2024 Global Data Centre Index. 

The report said the city has 1.6 gigawatts of total data center supply, including projects under construction, committed to or in the early stages of planning. Data center capacity is typically measured by the amount of electricity it consumes.

If all planned capacity comes online across Asia, Malaysia will only be surpassed by the larger countries of Japan and India. Until then, Japan followed by Singapore currently lead the region in terms of live data center capacity. 

The index did not provide a detailed breakdown of data center capacity in China. 

However, the global pandemic expedited the world’s digital transformation and cloud adoption, leading to surges of demand for cloud providers in emerging markets like Malaysia and India, according to a report from global data center provider EdgeConneX.

“Increased demand for video streaming, data storage, and anything done over the internet or on a phone, essentially means that there’s going to be more need for data centers,” said Murphy. 

Booming demand for AI services also requires specialized data centers to house the large amounts of data and computational power required to train and deploy AI models.

While many of these AI data centers will be built in established markets such as Japan, Murphy said emerging markets will also attract investments due to favorable characteristics. 

AI data centers require a lot of space, energy and water for cooling. Therefore, emerging markets such as Malaysia — where energy and land are cheap — provide advantages over smaller city-states like Hong Kong and Singapore, where such resources are limited.

Singapore recently changed its tune and laid out a roadmap to grow its data center capacity by 300 MW on the condition more projects meet green-friendly efficiency and renewable energy standards. Such efforts have attracted investments from companies like Microsoft and Google. 

Still, Singapore is too small for wide-scale green power generation, thus there remain a lot of limitations on the market, said DC Byte’s Murphy. 

Kenanga Investment Bank Research estimates that potential electricity demand from data centers in Malaysia will hit a total maximum demand of 5 GW by 2035. The current installed electrical capacity for all of Malaysia is about 27 GW, according to Malaysian electricity company Tenaga Nasional Berhad.

Local officials are increasingly concerned about the extent of this power usage, as quoted in a recent report from The Straits Times.

Johor Bahru city council mayor Mohd Noorazam Osman reportedly said data center investments should not compromise local resource needs, given the city’s challenges with its water and power supply.

Meanwhile, a Johor Investment, Trade, and Consumer Affairs Committee official told ST that the state government would implement more guidelines on green energy use for data centers in June.

The long-awaited bitcoin exchange traded funds launched in January, and financial advisors are on their way – though gradually – toward adopting them, according to BlackRock’s Samara Cohen.

For now, about 80% of bitcoin ETF purchases have likely been coming from “self-directed investors who have made their own allocation, often through an online brokerage account,” she said, speaking at the Coinbase State of Crypto Summit in New York City on Thursday. The iShares Bitcoin Trust (IBIT) was among the funds to debut earlier this year.

Cohen, BlackRock’s chief investment officer of ETF and index investments, noted that hedge funds and brokerages have also been buyers, based on last quarter’s 13-F filings, but registered investment advisors have been a little more “wary.”

CNBC recently polled its Advisor Council about why they and their colleagues are so cautious about the new products, which represent a regulated and familiar investment product for a new asset class that has garnered significant interest in recent years. Responses ranged from bitcoin’s notorious price volatility to the flagship cryptocurrency being too nascent to have established a significant track record. Regulatory compliance and the crypto’s reputation for fraud and scandal were also on advisors’ minds.

“I would call them wary … that’s their job,” Cohen said of the skeptical financial advisors.

“An investment advisor is a fiduciary to their clients,” she added. “This is an asset class that has had 90% price volatility at times in history, and their job is really to construct portfolios and do the risk analysis and due diligence. They’re doing that right now.”

“This is a moment, in terms of really putting forward important data, risk analytics [and determining] the role bitcoin can play in a portfolio, what sort of allocation is appropriate given an investor’s risk tolerance, their liquidity needs,” she added. “That’s what an advisor is supposed to do, so I think this journey that we’re on is exactly the right one and they’re doing their jobs.”

Cohen said she sees bitcoin ETFs as a bridge between crypto and traditional finance – particularly for investors who may be interested in making an allocation to bitcoin without having to manage their risk across two different ecosystems. Before the ETFs, the existing onramps into crypto were insufficient for what some investors wanted to do, she said.

Coinbase chief financial officer Alesia Haas said bitcoin is “on a slow journey of adoption” – a theme echoed across the conference sessions.

Blue Macellari, head of digital assets strategy for T. Rowe Price, pointed to the 1% allocation that some investors deem to be a safe, comfortable amount. She said she sees portfolio allocations into bitcoin as binary events, where they should be greater than 1% or zero, but she also acknowledged the cautious approach toward adoption.

“There’s a psychological component where people need to test the waters and get comfortable,” Macellari said. “It’s a paradigm shift … it takes time for people to ease their way into it.”