Global data center transactions have soared this year, once again hitting an all-time high, driven by a rush to build out the infrastructure needed for energy-intensive AI workloads.
The surge came even as investors became increasingly wary of soaring valuations in artificial intelligence and financing to support the rapid expansion of data centers. Global stocks were sold off in November due to deep-rooted concerns about AI-powered bubbles.
But S&P Global reported that more than $61 billion has flowed into the data center market this year, up slightly from last year’s $60.8 billion amid a “global construction frenzy.”
A surge in debt financing contributed to the record high, with hyperscalers increasingly turning to private equity markets rather than financing expensive infrastructure themselves.
The trend has raised concerns from some investors, who question the value of the advanced technology housed in data centers.
Cloud company stock oracle Shares fell 5% on Wednesday after reports that Blue Owl Capital would withdraw from a contract to support a $10 billion data center in Michigan. Oracle denied this report, but broadcom, Nvidia and advanced micro device It was withdrawn after publication. The Nasdaq Composite had its worst day in nearly a month, falling 1.81%.
Iuri Stolta, TMT analyst at S&P Global Market Intelligence, said his team expects market concerns around AI and Oracle to be temporary and unlikely to have a “significant impact” on data center construction or M&A in the near term.
“Competitive dynamics among frontier AI model providers such as OpenAI, Alphabet, and Anthropic are changing rapidly, which may impact investor sentiment in public markets. However, overall, we expect demand for AI applications to continue to grow strongly in 2026.”
Despite the recent decline in AI stocks, many analysts remain bullish on the sector. Bank of America said that “AI trade may still have room to continue until 2026,” but warned that rising stock prices do not mean a bubble is not forming.
“There are two sides to the development of AI, one that responds to optimism such as faster development of medicines, but at the same time there will also be concerns around (public) safety in general,” Wim Steenbachers, managing director of global lead satellites and technology at ING, told CNBC.
“Therefore, uncertainty remains regarding the monetization of technology and business models. Questions regarding high levels of investment will only be answered in the future when uncertainty decreases and the application of the technology and its benefits become clearer.”
There were more than 100 data center trades in the first 11 months of this year, and their total value already exceeds all trades made in 2024, according to data from S&P Global Market Intelligence. The majority of these transactions took place in the United States, followed by the Asia-Pacific region.
“In Europe, data center construction growth is expected to be lower than in other regions, but it remains to be seen whether this will lead to an M&A rush amid the asset shortage,” Stolta said.
A recent report from ING predicted that the pace of US growth would put Europe at a “disadvantage”, with US data center investment potentially increasing five times. Growth is also increasingly coming from the Middle East, as wealthy Gulf states seek to position themselves as the next global AI hub.
Government bond issuance will almost double in 2025
Bond issuance nearly doubled from $92 billion last year to $182 billion in 2025, according to S&P data. he pointed out. meta and google is one of the most active issuers, with the Facebook owner raising $62 billion in debt since 2022, with nearly half of that total issued in 2025 alone.
Google and Amazon Hyperscalers are increasingly collaborating with AI research institutes to buy assets to finance construction, the report said, in an “unconventional arrangement” that highlights the need for large amounts of capital to meet demand.
Struta expects further “robust” M&A investment activity in the data center space in 2026.
“I wouldn’t be surprised if an already high valuation goes even higher,” he told CNBC.
“Energy supply shortages may temporarily inhibit new data center construction, increasing the value of data centers already built. Availability for large data center companies remains in short supply, which could lead to further asset sales by companies that do not consider data centers to be their core business.”
