Data center deals hit record $61B in 2025 amid construction frenzy (www.cnbc.com)

In 2025, the global data center market reached a staggering $61 billion in deals, fueled by a construction boom aimed at supporting energy-intensive AI workloads. This unprecedented investment surge comes despite growing concerns from investors about inflated AI valuations and potential market bubbles. Major players, especially hyperscalers, are increasingly relying on debt financing from private equity sources to fund this infrastructure expansion, indicating both a demand for robust AI capabilities and a cautious investor sentiment regarding the sustainability of valuations. As the appetite for data centers continues to grow, particularly in the U.S. and the Middle East, S&P Global anticipates a strong demand for AI applications through 2026, despite recent stock market volatility. Analysts highlight mixed sentiments, noting that concerns about public safety and the profitability of AI technologies might dampen investor confidence in the short term. Nevertheless, robust M&A activity is expected in the coming years, with a potential increase in valuations as infrastructure becomes more essential to support the rising tide of AI innovations.