Data center insights - A&O Shearman

The rapid advance of artificial intelligence is creating unprecedented demand for data center capacity. For the developers, investors and hyperscalers driving the infrastructure build-out, the road ahead involves complex questions relating to the availability of power, shifting regulatory frameworks and access to finance. This report explores seven themes shaping the future of the data centers sector.

Published Date

Jul 16 2026

Summary

Geopolitics and regulation are major factors, with export controls, cloud-based compute restrictions, data localization rules and sovereignty requirements influencing deal structures, contracts and infrastructure location decisions.

Power availability is now the key constraint on growth, with grid connection delays and the need for near-perfect uptime pushing developers towards behind-the-meter solutions.

New partnership models are emerging to manage risk, including between developers and financial sponsors, and developers and power providers, with hyperscalers increasingly taking direct equity stakes.

Financing models are becoming more complex, moving beyond traditional real estate lending toward blended real estate, infrastructure, equipment finance, structured credit and capital markets solutions.

Cybersecurity, resilience and ESG obligations are also in focus as data centers are classified as critical infrastructure and scrutiny grows over their use of energy and water.