AI boom accelerates data center expansion in the US and beyond

Recently in Preqin First Close, we explored the latest deals and developments in the data center sector. We identified increasing activity across the US, as well as emerging hotspots in markets across APAC and Europe.  

According to our data, there were record levels of private capital data center-related infrastructure transactions in 2024 ($52bn aggregate value) – and this momentum has continued so far in 2025. 

Here, we take a second look at the industry, with a focus on US investment. 

Data center investment: key drivers and risk factors 

Management consultancy McKinsey expects that by 2030, data centers will need $6.7tn in global investment to meet the surging demand driven largely by AI. Generative AI language models – such as ChatGPT – require significant energy resources to train and operate, and widespread adoption will only intensify demand. It’s no surprise then that data center assets are at the forefront of investor considerations. 

According to Preqin’s Sector in Focus report (for Insights+ subscribers), potential for resilient cash flows with long leases from well-established clients, and eventual value-add opportunities such as renewable energy and advance technological integration, also encourage investment.

However, data centers aren’t without risks. Concentration and tenant dependency, operating costs, and potential obsolescence due to technological advancements are among several challenges, according to the report. And one particularly pressing concern is energy security.  

The International Energy Agency estimates that electricity demand from data centers worldwide is set to more than double by 2030 to around 945TWh. That’s more than Japan’s total annual electricity consumption. The US is projected to account for almost half of this growth.  

CBRE research shows data centers already account for 2.5% of total US electricity consumption, and nearly 20% of energy consumption in Northern Virginia, where almost half of US data centers are located.  

Grid operator PJM, which covers 13 states including ‘data center alley’ in Virgina, has reported a 22% increase in energy supply prices per megawatt day on the previous year according to the FT, citing the ‘soaring’ demand from AI data centers, and delays in building new power plants. 

A diverse range of resources will be needed to meet global energy requirements, with renewables expected to make a significant contribution. Securing reliable and affordable supply chains will therefore be crucial. 

The US dominates deal-making, but activity increases across Europe and APAC

Preqin data reveals North America has accounted for around half of data center deal volume since 2023. 

So far this year, Preqin Pro has recorded 42 data center deals globally across infrastructure and real estate, with an aggregate deal value of $12.9bn, already outpacing all other years (except 2024, when aggregate deal value hit $25.6bn) (Fig. 1). As of August 2025, North America accounts for half (21), followed by Europe (11), APAC (5), and rest of the world (5). 

Fig. 1: Data center deal activity maintains momentum in 2025 after surge in 2024  
Number and aggregate value of data center deals by region, 2015–2025 YTD 

_{Source: Preqin Pro. Data as of August 2025}

According to a report by research company Dell’Oro Group, data center physical infrastructure market grew 17% year-over-year in the first quarter of 2025, driven by AI build-out. This marks the ‘fourth consecutive quarter of double-digit growth’.

The largest deals recorded so far this year all target US assets. The list includes Macquarie Asset Management’s $5bn equity investment in Texas-headquartered Aligned Data Centers in January. Mubadala Infrastructure Partners and CenterSquare Investment Management are also investors as of 2023 and 2024, respectively. 

In February, Rowan Digital Infrastructure, a sustainable hyperscale data center developer and portfolio company of Quinbrook Infrastructure Partners, secured a further $1.2bn in construction financing to build the second phase of its flagship campus in Maryland. The financing was led by Sumitomo Mitsui Banking Corporation (SMBC) and MUFG Bank. 

It's a fast-emerging global business, too. In Europe’s four largest markets for data centers (London, Frankfurt, Paris, and Amsterdam), inventory increased by 7.2% over the past year, according to CBRE insights. Frankfurt and Paris experienced the biggest growth, at 13.7% and 11.2%, respectively. Demand in Frankfurt in particular has been boosted by the presence of the DE-CIX IP exchange. 

Germany-based fund manager DTCP told Preqin First Close that it expects big expansion in Europe’s AI-focused data centers in 2026 and 2027. ‘We continue to see a lot of infrastructure deployment by hyperscalers, technology, telecommunications, and cybersecurity players,’ says founder Vincente Vinto. 

Last month, US software company Gainsight opened a new data center in Germany to strengthen its commitment to EMEA growth and the global deployment of AI-powered customer intelligence. 

And in APAC, CBRE reveals inventory has increased by 4.4% over the past year across Singapore, Hong Kong, Tokyo, and Sydney combined. However, supply constraints in these major markets have shifted the focus to secondary regional markets in Malaysia and Australia.

Recent high-profile deals include Stonepeak’s $1.3bn equity investment in Singapore-based Princeton Digital Group to support its continued data center expansion in the region. There was also Blackstone and Canada Pension Plan Investment Board’s record A$24bn acquisition of Melbourne-based data center platform AirTrunk last September. 

Big Tech leads the way in US data center expansion

Total global data center capital expenditure increased 51% to reach $455bn in 2024, according to the Dell’Oro Group. Leading technology firms and hyperscalers including Google, Amazon, and Microsoft, accounted for more than half of this growth, driven by expanded investments in dedicated AI-networks and related infrastructure. Activity shows no signs of slowing in 2025.

As well as heavily investing and building their own AI-focused infrastructure and operations, hyperscale providers are partnering with private capital firms to accelerate development, unlock capital, and drive innovation. 

In September 2024, BlackRock, Global Infrastructure Partners (a part of BlackRock), MGX, and Microsoft announced the AI Infrastructure Partnership to mobilize up to $100bn in total investment to develop AI infrastructure, including data centers and related energy infrastructure. Since then, the partnership has expanded to include NVIDIA, xAI, Cisco, the Kuwait Investment Authority, and Temasek.

Also, The FT recently reported that Meta is in talks with major private capital players, including Apollo Global Management, KKR, Brookfield, and Carlyle, to raise $29bn to finance its build-out of data centers in the US.

Meanwhile, Google has partnered with Intersect Power and TPG Rise Climate to develop industrial parks with gigawatts of data center capacity in the US, along with new clean energy plants to power them. This marks ’a new approach’ to the way hyperscalers, power providers, and asset managers can work together to address the growth of AI, as well as society’s increasing electricity needs.  

Jayda Etienne is Deputy Editor, and Libby Fennessy is Production Editor of Preqin First Close.  

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_{The opinions and facts included in the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accepts no liability for any decisions taken in relation to the above.}