Data-center acquisition volume reached $18.3 billion in the first quarter of 2025, surpassing the $15.7 billion transacted in the first six months of 2024. The acceleration reflects institutional recognition that power-constrained markets cannot absorb the computing demand AI workloads now require.

Three transactions drove the quarter: Equinix acquired a 4.2-gigawatt portfolio from Aligned Data Centers for $7.1 billion in February, marking the largest single-asset deal in sector history. Digital Realty paid $5.8 billion for CyrusOne's remaining independent facilities in March. Iron Mountain entered hyperscale with a $3.9 billion purchase of Prime Data Centers' Southeast footprint. The remaining $1.5 billion came from sub-$500 million deals, primarily in secondary markets where power availability still exists.

The urgency stems from grid access, not construction capability. New data-center builds face 18-to-36-month power interconnection queues in Northern Virginia, Phoenix, and Dallas—the three markets that together represent 62% of U.S. colocation capacity. Acquiring existing facilities with energized substations eliminates that lag. Operators are paying 14-to-18x trailing EBITDA, a 40% premium to 2023 multiples, because the alternative is missing the AI infrastructure cycle entirely. Lone Pine Capital's latest 13F filing, disclosed this week, showed a $340 million new position in Equinix—institutional validation that the sector's growth is structural, not speculative.

The constraint is not capital. Blackstone, Brookfield, and KKR have collectively raised $22 billion in digital infrastructure funds since January 2024, with $18 billion still undeployed. The constraint is power. Data centers now consume 4.5% of U.S. electricity generation, up from 2.1% in 2020. Utilities in core markets are declining new interconnection requests or imposing 3-to-5-year build timelines. Operators who own energized sites control the scarcest input in the AI supply chain.

Allocators should track two follow-on events. First, watch for Equinix and Digital Realty to announce sale-leaseback transactions on newly acquired assets by mid-Q2, monetizing real estate while retaining operational control. Second, expect utilities in Texas and Georgia to publish updated interconnection capacity reports in May—those will signal whether secondary markets can absorb overflow demand or if the bottleneck spreads.

The sector has $61 billion in announced deals awaiting regulatory clearance, with $44 billion expected to close before July. That volume would make 2025 the largest M&A year in data-center history before summer ends.