Buying and selling AI data center developers and assets

In short

Global AI data center dealmaking reached a record of more than $61 billion in 2025, driven by AI infrastructure buildout. CNBC Power access, particularly secured grid connections and near-term electricity delivery, is the single biggest factor in a target’s valuation. The permanent restoration of 100 percent bonus depreciation for qualified property acquired and placed in service after January 19, 2025 gives buyers a powerful tax tool, allowing them to write off the full cost of qualifying equipment and improvements in the first year. BDO analysis Large deals often need federal antitrust review under the Hart-Scott-Rodino Act and national security review by the Committee on Foreign Investment in the United States (CFIUS) if a foreign buyer is involved. Acquisition financing increasingly relies on securitization. U.S. AI data center ABS and CMBS issuance reached an estimated $26 billion in 2025. Representations and warranties insurance (RWI) is a standard tool to protect the buyer if the seller’s statements about the business turn out to be wrong.

How big is the market for buying AI data center companies and projects?

Global AI data center M&A deal value reached $61 billion in 2025, a record just above the $60.8 billion recorded in 2024. More than 100 transactions closed in the first 11 months of the year. CNBC This surge is driven by the enormous demand for compute capacity from artificial intelligence. Hyperscale cloud companies, often called hyperscalers, are pouring capital into new infrastructure. Meta, Amazon, Alphabet, and Microsoft together planned to spend more than $320 billion on AI technologies and data center expansion in 2025, and CreditSights projects roughly $602 billion in capital expenditures for the top five U.S. hyperscalers in 2026. ARC Group, KBRA

U.S. construction spending on AI data centers reached $14 billion in July 2025 alone, nearly doubling the previous monthly record. ConstructConnect Private equity firms now control an estimated 80 to 90 percent of AI data center capital deployment. Global Data Center Hub This large inflow of capital means that both whole platforms and individual projects change hands at high volume and high prices.

How are AI data center acquisitions typically structured?

A buyer can acquire an AI data center business in two main ways. An asset purchase means the buyer picks specific assets, like land, buildings, servers, and contracts, and can leave certain liabilities behind. An equity purchase (also called a stock purchase) means the buyer buys the company that owns everything.

Asset purchase

In an asset purchase, every material contract (leases, power purchase agreements, and interconnection agreements) must be formally assigned to the buyer. This requires the consent of the other party on each contract. That process can delay closing. Law firm analysis, M&A analysis The main tax advantage is that the buyer can step up the tax basis of the acquired assets to their fair market value. This allows the buyer to claim much larger depreciation deductions, especially with 100 percent bonus depreciation now available, because the buyer can write off the stepped-up value of qualified property immediately.

Equity purchase

In an equity purchase, the buyer acquires the shares of the entity that owns the assets. Contracts generally remain in force without needing consent unless the agreement has a change-of-control clause. The downside is that the tax basis of the assets inside the company stays at the seller’s original, often much lower, level. So the buyer gets less first year depreciation.

Many AI data center acquisitions are structured as equity purchases for simplicity, but buyers often negotiate a Section 338(h)(10) election to treat the stock purchase like an asset purchase for tax purposes. That election gives the buyer a step up in basis while keeping contracts with the entity.

What special due diligence does an AI data center buyer need?

Standard corporate due diligence, reviewing financial statements, corporate records, and litigation, is only the baseline. An AI data center’s value depends on the certainty of cash flow from its key contracts, so a buyer must dig deeper.

Power contracts

The single most critical item is the power supply. The buyer must examine the interconnection agreement, which defines the maximum import capacity and the project’s position in the utility’s queue. Any delay or limitation in power delivery can destroy the project’s economics. The power purchase agreement (PPA) sets the price, term, and service levels. A buyer should closely review these contracts to make sure the power is available, reliable, and affordable. Industry analysis

Customer leases

AI data centers often rely on a small number of hyperscaler tenants on long term leases of 10 to 15 years. Losing even one lease can undercut the entire financial model. Due diligence includes verifying the creditworthiness of the tenant, the enforceability of the lease, and any rights the tenant has to terminate early or reduce capacity.

Title, easements, and rights of way

AI data centers need fiber optic connections and high voltage power lines. The buyer must review rights-of-way and access easements to ensure the site has clear, perpetual access to those networks. Title to the land itself must be free of defects that could impede development.

Environmental, permitting, and zoning

AI data centers consume substantial electricity and water. Local permits, environmental impact assessments, and zoning approvals can be hurdles. A buyer should confirm that all necessary approvals are in place or can be obtained on a feasible timeline. Data center environmental and permitting analysis

How do federal tax rules change the economics of an AI data center acquisition?

The tax code can dramatically affect the after-tax cost of a deal. Several provisions became more generous for buyers after the One Big Beautiful Bill Act (OBBBA) was signed on July 4, 2025.

Bonus depreciation (Section 168(k))

The OBBBA permanently restored 100 percent bonus depreciation for qualified property placed in service after January 19, 2025. BDO analysis Qualified property includes assets with a recovery period of 20 years or less, such as computer servers, racks, electrical distribution equipment, cooling systems, and qualified improvement property (QIP). Both new and used property qualifies as long as the buyer did not buy it from a related party. This means a buyer can deduct the full cost of most tangible assets in the year they are placed in service.

Section 179 expensing

For smaller purchases, Section 179 allows an immediate deduction of up to $2,560,000 for tax years beginning in 2026, with a phase-out threshold of $4,090,000. Section179.org This is useful for individual equipment purchases within a larger deal.

Section 179D energy efficient building deduction

The energy-efficient commercial building deduction provides up to approximately $5.81 per square foot for qualifying improvements. However, the OBBBA accelerated its termination to June 30, 2026 for projects that have not yet begun construction. CLA analysis, DOE 179D page Buyers acquiring incomplete projects should check whether they can lock in this deduction before the cutoff.

Cost segregation studies

A cost segregation study reclassifies building components into shorter lived property categories. For a typical AI data center, 40 to 60 percent of construction costs can be classified as 5-year, 7-year, or 15-year property eligible for bonus depreciation, rather than the standard 39-year straight line. R.E. Cost Seg Consider a hypothetical $10 million AI data center project acquired after January 19, 2025. With a cost segregation study and 100 percent bonus depreciation, the first-year depreciation deduction could exceed $4 million. Without cost segregation, the same project would yield only about $256,000 in year one. R.E. Cost Seg

Section 197 intangibles

Goodwill, customer relationships, and trade names are Section 197 intangibles. They do not qualify for bonus depreciation. Instead, they must be amortized straight line over 15 years, giving a deduction of about 6.7 percent of the allocated value each year. Cogent Growth Partners In a deal, how the purchase price gets split between tangible assets and goodwill has a large impact on the timing of tax deductions.

Business interest deduction (Section 163(j))

For tax years beginning after 2024, the OBBBA permanently removed depreciation, amortization, and depletion from the adjusted taxable income (ATI) calculation. The interest deduction is now limited to 30 percent of earnings before interest and taxes (EBIT), rather than EBITDA. This change helps highly leveraged buyers because the ATI figure is larger when depreciation is excluded from the formula. BDO analysis, BDO analysis

Research and experimental costs (Section 174)

The OBBBA restored immediate full expensing for domestic research and experimental costs for tax years beginning after 2024. AI data center operators that develop new energy management systems, cooling technologies, or proprietary software can deduct those costs right away. BDO analysis

State decoupling

Several states, including California, Massachusetts, and New York, do not conform to the federal bonus depreciation rules. BDO analysis In those states, a buyer may need to maintain separate depreciation schedules for state tax purposes. This reduces the state-level tax benefit and should be factored into the overall deal model.

When does a buyer need to file for antitrust review?

The Hart-Scott-Rodino Antitrust Improvements Act requires parties to a merger or acquisition to notify the Federal Trade Commission (FTC) and the Department of Justice (DOJ) before closing if the transaction meets certain size thresholds. Failing to file can result in significant fines. 15 U.S.C. § 18a

2025 filing thresholds

For 2026, a filing is required if the acquirer will hold voting securities, assets, or noncorporate interests worth more than $133.9 million, provided that one party has annual net sales or total assets of at least $267.8 million and the other party has at least $26.8 million. If the total transaction value exceeds $535.5 million, a filing is required regardless of the parties’ size. FTC current HSR thresholds

Filing fees range from $30,000 for deals under $179.4 million to $2.39 million for deals at or above $5.555 billion. HSR update analysis

The new HSR rules and legal challenge

New HSR filing rules took effect on February 10, 2025. They added detailed new disclosure requirements, such as descriptions of competitive overlap with sales data and top customer lists, supply relationship descriptions, and disclosures of foreign subsidies. Federal Register The estimated average preparation time rose from 37 hours to between 68 and 105 hours. However, in February 2026, a federal district court vacated the rule. The FTC has appealed and the antitrust agencies have also requested public comment on possible new changes. EveryCRSReport As of mid-2026, the filing rules are unsettled. Buyers should work with antitrust counsel to determine which form and disclosures are currently required.

When does a foreign buyer need CFIUS approval?

The Committee on Foreign Investment in the United States (CFIUS) reviews foreign acquisitions of U.S. businesses to decide whether they pose national security risks. Its authority comes from Section 721 of the Defense Production Act of 1950, as amended by FIRRMA. 50 U.S.C. § 4565, CFIUS overview

Mandatory filings

A mandatory CFIUS filing is required when a foreign government acquires a substantial interest in a U.S. business that involves critical technology, critical infrastructure, or sensitive personal data (a TID U.S. business), or when the transaction involves critical technologies subject to U.S. export controls. An AI data center that is collocated at a submarine cable landing point, landing station, or termination station is classified as covered investment critical infrastructure under CFIUS regulations. Also, a U.S. business that maintains or collects sensitive personal data on greater than one million individuals may qualify as a TID U.S. business under CFIUS regulations, which can subject certain foreign investments in that business to CFIUS review. 31 C.F.R. § 800.248, 31 C.F.R. § 800.241, 31 C.F.R. § 800.401

Process and risk

In 2024, CFIUS reviewed 209 notices and 116 declarations, with 55 percent of the notices moving to a full investigation. The committee can impose mitigation measures, like appointing a U.S. government security officer or limiting access to certain areas. CFIUS has no statute of limitations. It can review a deal that was never filed years later and even order divestiture. For example, a Chinese-owned entity’s non notified 2022 acquisition of crypto mining land near a Wyoming missile base ultimately led to a presidential divestiture order in 2024. CFIUS 2024 Annual Report, Treasury press release, Executive order

In May 2025, CFIUS announced a Known Investor fast track pilot to speed up reviews for trusted allied investors. Treasury Department press release At the same time, the America First Investment Policy announced in February 2025 directed CFIUS to restrict Chinese investment in sensitive technologies including artificial intelligence and called for consideration of new outbound investment curbs on semiconductors, AI, and quantum technologies. White House

Any AI data center deal with a foreign buyer, especially from a country designated as an adversary, must consider CFIUS early. Even voluntary filings are common to obtain a safe harbor letter, which shields the deal from later challenge.

How are large AI data center acquisitions financed?

Large acquisitions in this sector are funded through a mix of equity from private equity firms and institutional investors, along with debt that increasingly comes from the securitization markets.

The rise of securitization

Cumulative U.S. data center ABS and CMBS issuance totaled approximately $49 billion through May 2025. KBRA, KBRA, CREFC Data Center E-Primer In full-year 2025, new issuance reached an estimated $26 billion, split roughly evenly between ABS and CMBS, up from $11.4 billion in 2024. CREFC Data Center E-Primer

ABS transactions typically use fixed rate notes with a five year soft bullet repayment profile, leverage of 8 to 12 times operating income (roughly 65 to 70 percent loan to value), and a master trust structure that allows the issuer to add new collateral over time. CMBS deals for AI data centers are usually single asset single borrower (SASB) structures secured directly by the real estate. KBRA, SFA Research Corner, Penn Mutual analysis

Examples

• Switch completed two securitizations in 2025 totaling $3.5 billion, including a $2.4 billion SASB CMBS and a $1.1 billion ABS, both designated as green bonds. Switch press release
• Blackstone/QTS issued a $3.5 billion floating rate SASB CMBS in November 2025, backed by about 10 QTS AI data centers. The deal was heavily oversubscribed. CREFC Data Center E-Primer
• Aligned Data Centers raised $12 billion in early 2025, including over $5 billion in new equity and $7 billion in debt commitments. SFA Research Corner

These tools allow acquirers to stretch their equity and execute multi billion dollar transactions.

Joint ventures and the role of private equity

Many AI data center developments and acquisitions are done through joint ventures. The typical structure pairs an experienced operator who manages construction and leasing with a large financial investor who provides the bulk of the capital. The operator usually holds a 20 to 25 percent equity stake and earns fees, while the financial investor holds the remainder. Investment bank analysis

Market participants increasingly form joint ventures, and private equity firms now control an estimated 80 to 90 percent of data center capital deployment. Global Data Center Hub

How does a joint venture split the profits?

In a typical AI data center joint venture, the distribution of cash follows a waterfall structure. The steps are as follows.

1. Return of invested capital. All cash first goes to paying back each partner’s equity contribution.
2. Preferred return. The financial investor receives a preferred return, commonly 8 to 10 percent IRR, on its contributed capital before the operator takes any share of profits. Law firm analysis of data centre JV waterfalls
3. Promote. After the preferred return is met, remaining profits are split. The operator commonly receives a 20 percent promote (carried interest), with the financial investor taking the other 80 percent.

For example, imagine a project with a $100 million total cost, where the financial investor puts in $80 million and the operator $20 million. The preferred return is 10 percent. When the project is sold, the first $100 million goes back to the partners to return their capital. Then the financial investor receives a 10 percent annualized return on its $90 million. Once that hurdle is cleared, the operator earns 20 percent of any remaining profit, and the financial investor gets 80 percent.

Beyond the promote, the operator typically collects development management fees of about 4 to 5 percent of total capital expenditures, and ongoing management fees of 3 to 4.5 percent of revenue. Data centre M&A review

How does insurance protect a buyer if the seller’s statements prove wrong?

In any acquisition, the seller gives representations and warranties (promises about the state of the business, such as that contracts are valid, there are no hidden lawsuits, and financial statements are accurate). If those promises turn out to be false, the buyer can sue for damages. But in AI data center deals, the seller may be a fund with limited ongoing assets, and the buyer’s main concern is the cash flow from long-term leases that extend far beyond the typical survival period of those warranties.

To address this, buyers often purchase representations and warranties insurance (RWI). An RWI policy pays the buyer for losses caused by breaches of the seller’s warranties, up to a negotiated limit. The insurer does its own underwriting and can help resolve deal uncertainties.

Market trends

The cost of RWI coverage declined in recent years. Premiums fell to a policy limits range of 2.5 to 3 percent down from about 5 percent in early 2022.CBIZ One leading insurer, Euclid Transactional, has paid over $1 billion in RWI claims and received 792 submissions in August 2025 alone. Euclid Transactional Policy periods generally run 3 years for general warranties and 6 years for fundamental and tax warranties. SRS Acquiom

Application to AI data center deals

Because an AI data center’s value is tied to the performance of its long-term leases and power contracts, the purchase agreement should contain warranties specifically tailored to those contracts. RWI can backstop those warranties. Without insurance, a buyer might have only an 18 month window to discover and sue for a breach that does not become clear until year three. With RWI, the buyer can have coverage extending well beyond the typical survival period, with policy periods typically providing six years for fundamental and tax representations and three years for non fundamental representations. Law firm analysis, RWI market analysis, Law firm analysis

What are the biggest AI data center deals in recent years?

The following table lists landmark acquisitions and capital raises in the AI data center sector from 2022 to 2025. Values are in U.S. dollars.

CNBC, DCD, Financier Worldwide, AI & Data Insider, Law firm analysis, Alantra 2024 Data Centre M&A Review

In addition to these acquisitions, the Stargate Project joint venture, announced in January 2025 with initial deployment commitments of $100 billion and a planned $500 billion in total investment by 2029, is a massive infusion of capital for AI infrastructure. OpenAI, Reuters, Wikipedia

What drives the price an AI data center target can command?

The single most important factor in an AI data center’s valuation is access to reliable, scalable power with certainty of delivery. Financier Worldwide Sites that have secured grid connections, cleared the interconnection queue, and have a near-term path to energization trade at a premium. Sites where power is speculative or still years away trade at a discount.

The market’s enthusiasm is reflected in the high valuation multiples. As of January 2025, the data center sector traded at an average enterprise value to EBITDA (EV/EBITDA) multiple of 30.9x, compared to 17.4x for the S&P 500. Alantra 2024 Data Centre M&A Review While the exact purchase multiples for private deals like the $40 billion Aligned acquisition have not been disclosed, the prior record AirTrunk deal was rumored to be approximately 30x EBITDA.

Thus, for both buyers and sellers, power availability is the core determinant of value.

Key takeaways

• The AI data center M&A market is at record levels, driven by hyperscaler demand and private equity capital. Deals reach tens of billions of dollars.
• Choosing between an asset purchase and an equity purchase involves tradeoffs between contract continuity and tax basis step-up. An asset purchase allows more first-year depreciation but needs third-party consents.
• Due diligence must center on the power supply, customer leases, and rights-of-way. The loss of a key contract can destroy value.
• 100 percent bonus depreciation permanently restored by the OBBBA makes the tax treatment of acquired assets a critical deal lever. Cost segregation can multiply the benefit.
• Large deals are likely subject to HSR antitrust filing. The new expanded filing rules have been vacated, but the legal situation is in flux, so plan for longer preparation time.
• Any deal involving a foreign buyer must be screened for CFIUS. Data centers are critical infrastructure, and CFIUS can review deals retroactively.
• Securitization (ABS and CMBS) now funds a significant portion of acquisitions. Joint ventures between operators and financial investors dominate the development landscape.
• Joint venture waterfalls typically give the financial investor a 10 to 12 percent preferred return and the operator a 20 percent promote after that hurdle.
• Representations and warranties insurance is a standard tool to protect the buyer, especially important because the key asset, a long-term lease, may outlast a typical warranty survival period.
• Power access is everything. Deals are priced on the certainty of power delivery, and sites with secured power command a premium.

Frequently asked questions

Q:Do I have to file with the FTC before buying an AI data center company?

A:If the transaction meets certain size thresholds (generally if the acquirer will hold $133.9 million or more in voting securities or assets, and the parties meet the size of person test, or if the deal exceeds $535.5 million) then you must file a notification with the FTC and DOJ under the Hart-Scott-Rodino Act. Failure to file can result in civil penalties. 15 U.S.C. § 18a

Q:When does CFIUS review apply to an AI data center deal?

A:CFIUS review applies to any transaction that could result in foreign control of a U.S. business. For AI data centers, which are critical infrastructure, a mandatory filing is required if a foreign government acquires a substantial interest, or if the deal involves critical technologies subject to export controls. Even if not mandatory, voluntary filing is common to secure a safe harbor from future challenge. 50 U.S.C. § 4565

Q:What is bonus depreciation and how does it help a buyer?

A:Bonus depreciation allows a buyer to deduct 100 percent of the cost of qualified property in the year it is placed in service, rather than spreading the deduction over many years. The OBBBA permanently restored this rule for property placed in service after January 19, 2025. For an AI data center acquisition, this can mean writing off most of the value of servers, cooling equipment, and electrical systems in year one. BDO analysis

Q:What is the difference between an asset purchase and a stock purchase for an AI data center?

A:In an asset purchase, you buy specific assets and can leave certain liabilities behind. You also get to step up the tax basis of those assets to their current value, which maximizes depreciation. However, you need consent from the other parties to assign every key contract, which can add 60 to 90 days to the timeline. In a stock purchase, you buy the company that holds everything. Contracts usually stay in place without consent, but you do not get a step-up in basis. Law firm analysis

Q:How much does representations and warranties insurance cost?

A:RWI premiums typically range from 2.5 to 3 percent of the policy limit, down from about 5 percent in early 2022. Policy periods generally last 3 years for general warranties and 6 years for fundamental and tax warranties. Lockton UK

Q:What is a joint venture waterfall?

A:A waterfall is the order in which cash from a project is distributed among partners. Usually, capital contributions are returned first. Then the financial investor receives a preferred return (often 8 to 10 percent IRR). After that, remaining profits are split, with the operator often getting 20 percent and the financial investor 80 percent. This rewards the operator for achieving a high sale price. Alantra 2024 Data Centre M&A Review

Q:What is the difference between ABS and CMBS for AI data center financing?

A:ABS (asset backed securities) are bonds backed by the cash flows from a pool of assets, such as leases or tenant receivables. They typically use a master trust structure and are fixed-rate. CMBS (commercial mortgage backed securities) are bonds backed by mortgages on commercial real estate, and in AI data centers they are often floating-rate SASB transactions. As of May 2025, year-to-date issuance split roughly 50/50 between the two. KBRA

Q:Does a small acquisition under $50 million need HSR or CFIUS review?

A:An acquisition under $133.9 million generally does not trigger an HSR filing requirement, unless other factors apply. FTC HSR threshold guidance CFIUS review is not based on transaction size but on the nature of the business and the investor’s foreign involvement. A small deal could still be reviewed by CFIUS if it involves critical infrastructure or sensitive data. CRS Report on CFIUS

Q:What happens if we close a deal without notifying CFIUS?

A:CFIUS has no statute of limitations and can review a non-notified transaction years later. If it finds a national security risk, it can impose mitigation measures or even order the foreign buyer to divest. For example, a late-discovered crypto mining transaction led to a divestiture order in 2024. Treasury press release It is risky to skip voluntary filing when there is any plausible CFIUS nexus.

Q:Can a buyer use cost segregation to reduce taxes on an existing AI data center purchase?

A:Yes. Even if the AI data center is already built, a buyer can commission a cost segregation study after acquisition. The study reclassifies building components into shorter depreciation lives, allowing a large portion of the purchase price to be written off with bonus depreciation. For a $10 million project, this could increase first-year depreciation from about $256,000 to over $4 million. R.E. Cost Seg

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Junde Liu, JD, LL.M. (Taxation) candidate at UF Law. Originally published on Compute Law Blog. This article is general information and does not constitute legal advice. Reading it does not create an attorney client relationship. The reader should not act on the basis of any content here without first consulting a licensed attorney in the relevant state. Last reviewed for accuracy May 23, 2026.