US data center deals hit their highest level in five years in 2026, with private equity firms and infrastructure investors pouring billions into physical facilities that process data. According to S&P Global Market Intelligence, the surge is being driven by demand from artificial intelligence systems, which require enormous amounts of computing power and cooling. A decade ago, data centers were a boring real estate subsector. Now they're being treated like core infrastructure assets.

The size of recent deals tells the story. In late June, Digital Realty agreed to buy a larger stake in three data centers near Washington, DC from Blackstone for $3.5 billion—putting a total value of $7.8 billion on those three facilities. Northern Virginia has become the world's largest data center market by capacity, and this price tag offers one of the clearest recent benchmarks for how much investors are willing to pay for hyperscale-adjacent colocation assets—essentially, facilities that handle extreme compute loads for multiple tenants in what's known as "Data Center Alley."

A few months earlier, in April, Bain Capital put a stake in Bridge Data Centres, a Singapore-based operator serving Asia-Pacific, up for sale at a $5 billion valuation, according to Reuters. Private equity sponsors who bought into digital infrastructure during the early 2020s are now testing what buyers will pay, and the pool of interested buyers has grown: strategic operators, sovereign wealth funds (investment vehicles for governments), and competing PE firms are all competing for the same pool of powered land and interconnection rights.

The activity extends beyond the US and Europe. Bloomberg reported in February that PT Telkom Indonesia is revisiting plans to sell a stake in its data center unit, banking on growing investor hunger for Southeast Asian digital infrastructure. Around the same time, Bloomberg also reported that Singapore's GIC sovereign wealth fund is considering a sale of its 80% stake in a European data center venture, potentially valued at up to $1 billion. GIC's dual role—both a major buyer and now a prospective seller of data center stakes—captures what's happening in the current cycle: capital that moved in early is looking for exits and profits, while fresh capital keeps showing up behind it.

That fresh capital has indeed arrived. Vantage Data Centers closed a $6.4 billion equity investment round led by DigitalBridge and Silver Lake, money that will fund further development of massive computing campuses backed by long-term power and land contracts. Apollo-managed funds separately agreed to take majority control of Stream Data Centers, extending the finance giant's broader pivot into data centers as a core private markets bet rather than a side opportunity.

Several patterns run through all these transactions. Buyers are betting that AI training and AI inference—the work of teaching and then running AI systems—will sustain years of demand for power-intensive colocation space. That said, big questions linger about whether companies can actually make money from AI fast enough to justify the infrastructure billions flowing into the sector. Sellers, meanwhile, are seizing on valuations that have surged sharply from five years ago, when these assets were priced more like conventional office-rental real estate than like infrastructure with embedded optionality on computing power scarcity.

One structural detail matters. Much of the recent activity—including the Digital Realty-Blackstone deal and the Vantage funding round—involves large minority-stake sales or partial monetizations rather than outright changes of ownership. That approach lets original owners lock in gains without giving up day-to-day control and future upside, while letting new capital—much of it from infrastructure funds with long-dated obligations to meet—gain exposure to AI-linked real assets without taking on all the development and leasing risk themselves. It mirrors the financing pattern of core-plus infrastructure deals far more than traditional private equity buyouts, and it shows how thoroughly data centers have shifted into institutional infrastructure portfolios over recent years.

Here's what may matter most going forward: power availability, not capital, looks like the true constraint on deal growth. Every transaction here depends on a pipeline of grid interconnection queues, backup power generation arrangements, and land reserves that determine how quickly new capacity can be built. The valuations underpinning these deals rest on the assumption that power supply will keep pace with hyperscaler investment plans—the spending by giants like Google and Microsoft. If utility connection timelines slip any further, the gap between capital sitting ready to invest and actual megawatts available for use could widen, putting strain on the price multiples justifying deals like the Bridge Data Centres sale. For now, though, deal counts and dollar volumes suggest sponsors still have willing capital on both sides of the table.